Property market is thriving, even during the havoc created by COVID-19 and the uncertainty due to Brexit. Amazed! Yes, we are too.
Do you want to find the UK hotspots that can potentially offer you up to 6% of capital growth or achieve 11% of rental yield?
Of course, you do! So read on…
UK property is considered one of the most lucrative hotspots, globally. When it comes to investing your money, the diverse set of UK cities offer a lot of investment potential. You have a chance to build a great property portfolio and increase your wealth.
Initially, Brexit introduced market uncertainty leading to an adverse impact on the investment markets as a whole. This wasn’t enough when the Coronavirus caused a global pandemic in 2020, sending shock waves throughout the world. The global stock market experienced a crash on 12 March 2020, signaling the ‘official’ beginning of the COVID-19 recession. This led to many people pulling out their stock investments and looking for alternatives.
While the stock market was severely affected by the COVID-19 outbreak, remarkably, there have been no noticeable changes to the property market. Some areas have rather seen the property prices rising at their quickest since July 2018. Additionally, according to a survey from Benham and Reeves, 83% of those surveyed said that they are still planning to continue with their property sales and purchases, despite the Coronavirus situation.
If you’re interested in investing in the UK property, and you should be, it is key to undertake sufficient due diligence. And the starting point is finding out the top places where your investment is most likely to benefit.
We, at Zisk Properties, have been hard at work irrespective of the lockdowns and have identified below a list of the top 10 cities for property investment in the UK.
List of Top 10 Cities to Invest in UK Properties in 2020
Below we have listed the locations with the most potential.
The list offers you insights into these UK cities including highlighting:
- the most affordable property prices
- the highest rental yields
- the strongest capital growth potential.
These top 10 locations have been specifically identified for the year 2020, noting its uncertainties – COVID19 and Brexit recessions. In our opinion, these are the places with the highest-earning potential for your investments.
Birmingham is the economic powerhouse of the West Midlands. It is the second-largest UK city, after the capital. Having thrived for being a vibrant place to live, work, visit or do business. The city’s growth has outpaced all of the major UK cities, just behind London.
In 2018, Birmingham attracted the highest number of foreign direct investments, after London and the South East (the largest economic hub in the UK, after London).
So it is no surprise that Birmingham is considered an ideal location for investors and buyers. Foreign investors have also recently marked it as a safe haven to invest. Average property prices in this city are around £250,000, with average rental yields of 4%.
The city has transformed in the last two decades. Becoming one of the most prevalent property growth areas of the UK. Birmingham’s geographical value and its economic position is really attractive. Situated at the heart of the country, having excellent domestic and international transport links, makes it an ideal investor attraction. Numerous international brands and businesses have also started building their local presence.
Birmingham boasts high growth during these last 10 years. The average growth in property value of 31% is higher than the growth seen in other property investment hotspots in the UK. Birmingham also has several huge development projects underway. A £500 million redevelopment of a New Street Station and a £150 million development of Grand Central Shopping Attraction, are the major ones. Other developments such as Paradise and Arena Central are also progressing swiftly.
The major attraction of this development is the £1 billion planned regeneration scheme for the arrival of the UK’s High-Speed 2 (HS2) rail line in 2031. Experts are projecting a £4 billion forecasted increase in the area’s economic output per year for the West Midlands, which will massively benefit Birmingham.
The attractive property investment areas in Birmingham include:
- The City Center is an ideal location to live in and as a result, has a huge demand for property. Apartments, flats and separate houses are all a priority for professionals, singles and couples. Expect to find a mid-sized house between the range of £196,000 and £246,000.
- Digbeth and the East Side are both towards the east of Birmingham city. These are rapidly changing, with a lot of regeneration and large developments underway. Rental buildings are also in high demand. Investors can easily earn rental yields of up to 6%. Expect to find a house for an average price of around £200,000.
- Western Birmingham is also considered a good investment spot. You can find houses between the price range of £250,000 and £350,000. Rental yields are also good between 4 to 5%.
Birmingham’s city boats, excellent road and rail networks, and one of the best air transport links make it a second home for many. Its rapidly expanding economy, much faster than the wider West Midlands, is forecasted to continue to do so over the next decade as well. The expected HS2 phase 1 completion by the year 2026 will link it with 8 out of the 10 largest cities of the UK. Travelers will reach London in just 49 minutes. Yes, just 49 minutes!
Birmingham should be high on your list of property investment ventures. Well, it definitely is on top of ours. Its rising population (163% between 2002 and 2015), strong future developments underway and excellent future economic prospects make it a top hotspot for capital appreciation in 2020.
Worth highlighting that if you want to invest in property for high capital growth, but don’t want to focus on the North of England, then Birmingham is your best choice.
The city of Manchester is one of the most in-demand cities in Europe. With its growing business scene, thriving student population, vibrant culture and exciting prospects, it is the ultimate place to live, work and invest.
There are so many reasons why this northern city is considered as one of the top UK property investment hotspots. It has attracted large amounts of investments, which is transforming its skyline. It is famous for the two international football clubs, a big film and the TV industry, and the music-loving nature of its people. Manchester offers similar, yet slightly higher, capital growth potential to Liverpool.
Manchester is one of the regional UK cities – Birmingham and Leeds being the other two – which are all currently flourishing. Due to the rapidly increasing prices in London and South East over the past decade, combined with the recession, investors are looking outside for more fruitful alternatives. If you are interested in Manchester property, expect some of the most impressive rental yields in the UK.
Manchester properties continue to attract high levels of interest from international buyers as well. The city attracts plenty of young professionals and families and is one of the most exciting places to live and work in the UK. Over 2,000 foreign-owned companies have a base in Greater Manchester. The city’s economy is growing at a faster rate than the UK, as a whole. All of this exciting growth is having a sustained impact on Manchester’s property market.
Manchester is also another important player in the UK’s regeneration sequence. The most notable project in recent years is the MediaCityUK, a billion-pound scheme which saw Salford Quays Docks to be transformed into a vibrant hub for leisure and business. Manchester is also home to a number of huge business names like the BBC and ITV. MediaCityUK has attracted a lot of interest to Manchester over recent years, boosting the demand for property and helping house price growth and strong rental yields.
These are a few attractive areas in Manchester for investment:
- The Old Trafford area in Manchester is a great town for investment. Home to many businesses, it has a current population of 240,000. Average rental yields are a little lower than some of the other areas. Though, the rapid rise in population with many young professionals, students and investors staying here, offers a decent growth potential. New construction for homes is fast and you can easily buy a home for around £187,000.
- The City Centre is another lucrative place for investment since it is highly commercial. Prices of properties are higher than the other areas. Expect an asking price of around £256,000. Speaking about capital gains, there is an increasing trend. Since only about 18,000 people live here, more and more people are attracted to the centre to enjoy a higher standard of living. As a result, investors are enjoying high rental returns.
- Salford is the regeneration zone of Manchester city, with a population of over 250,000. The area is undergoing huge developments and investors are attracted to it. Salford properties are available at reasonable prices for around £220,000. Additionally, the University of Salford is the main attraction for students and rental prices are increasing day by day.
- Fallowfield is a suburb of Manchester and a peaceful place to live in. With a low population and the majority of them being university students and young professionals, rental yields are growing. In recent years, yields have increased to up to 11%. If you want a longer term investment and want to earn a reasonable rental income on your investment, then Fallowfield is a great place to invest in. Average property asking prices are around £210,000.
By 2024, property in north-west England is forecasted to have the strongest price growth of any UK region. Manchester is the North West’s largest city and will be at the heart of this sustained period of growth for investors. Manchester is home to some of the most prestigious universities and large names in the business arena. It also boasts some of the highest student retention rates in the country.
More and more people are moving up to Manchester from London in recent years. It is clear why there is such a high demand for quality property. The city as a whole is on the rise and the time to invest in Manchester has never been more fruitful.
Liverpool is a recognised capital of culture and has a tourism industry worth around £5 billion. It was the first city in England to go into the highest lockdown tier, thus showing its significance.
Growing housing price, a strong student population and incredibly high rental yields, makes Liverpool property an excellent investment. Liverpool’s economy is booming, with new businesses, new developments and massive regeneration schemes contributing to an economy worth over £121 billion.
Liverpool comes out on top as one of the UK’s most affordable investment cities, featuring an average property price of £182,913, according to Zoopla. This Northern gem is a favourite place for those seeking to keep costs low while reaping the maximum benefits. With new developments, great career opportunities and rising tenant demand makes it a top investment destination.
Important highlights of Liverpool property investment are:
- a consistently high demand for property form investors during the recent years;
- a large demand for tenantable properties due to 70,000 plus university student residents;
- a strong capital growth seen during the past few years which is rising each year;
- an attraction for tourists and wider people to live in Liverpool, increasing the property demand.
Liverpool has among the highest rental yields for buy-to-let in the UK. The L7 and L1 postcodes have regularly achieved yields of around 8% over the last 5 years. Other postcodes like L2 achieve 7.3%, L11 giving 8.7%, L4 giving 7.1% and L3 achieving 7.4% in the year 2020 is impressive.
Properties in Liverpool are also affordable, well, too affordable. Compare the £107,000 average value of a one-bedroom flat in Liverpool with the same property type in London for £454,000. Liverpool investment is clearly cheaper and with much higher returns.
Liverpool property investment is a lucrative choice for many. So much, that it has recently been recognised as one of the best cities in the country for buy-to-let property investment. The city has transformed itself into a buy-to-let property hotspot and an international destination with mass appeal.
Consider this, when just 2 years before in 2018, the property conditions were not favorable in the UK and investors were reluctant to invest in property. Liverpool was still performing better in the property market at that time and so will it in the coming years.
Leeds is located in West Yorkshire, making it a prominent place in the UK. What makes Leeds attractive for real estate investment is that its current population is growing seven times more rapidly than the population of London. Hence, creating a huge property demand.
Leeds is the largest city in the county and also the largest legal and financial centre outside London. It is centrally located and famous for business and tourism. City museums and music festivals are the trademarks of Leeds. A key destination within the Northern Powerhouse and nearly £7 billion of development in the pipeline, makes Leeds’ city centre ready to double in size, rather quickly.
Leeds is leading the UK in its economic sector. The developments are causing its worth to increase by more than £65 billion per year. The last decade has seen a 40% rise and economists are expecting a further increase of 21% in the next decade.
Employment levels are also rising in the city, creating rental demands from young professionals. Besides this, Leeds is also a famous tourist spot. Tourists most often hire serviced apartments for their short trips. Which has become one of its primary reasons behind its sharp increase in the real estate industry.
Average property prices are £270,000 and average rental yields of 5%. The projected regional 5-year house price growth will be 24% and last year alone, has seen around a 4% increase in the property value. This is a sign of progressive capital gain in the UK market.
Some of the more attractive areas in Leeds worth considering for your property investments in 2020 are:
- The City Centre has around 33,000 people. The average property price is around £180,000 which is fairly low for its prime location. Be amazed to view the high 20 to 30 storeys office and residential buildings on the rise. These are near to completion and required to meet the increasing property demands of the region.
- Headingley is located in the north of Leeds city and is famous among students. The Leeds Beckett University campus is also situated in it. Students rent out houses and buildings to stay near their university. Headingley is also famous because of its schools, shopping centres and transportation system. Landlords in Headingley enjoy attractive rental yields of 7.4%. Population is about 32,500 people and the average property price is around £ 217,000.
- Hunslet and Beeston are the two suburbs of Leeds where mostly terraced houses are built. The best part is that these have the lowest property prices in Leeds. You can buy an average house for just £138,000. The population of these areas is fairly high at 79,000 and the low property prices make it ideal for investors who want to invest in longer term projects.
The numerous regeneration projects, combined with the many positive factors outlined, are creating a massive increase in the city’s property demand. There is a dire need for more houses to be built to fulfill this increasing demand.
It is the best time for investors to invest in the real estate sector of Leeds. The city has enjoyed the fourth biggest increase in UK house prices. So if you want to invest for a longer term and earn great rental income regularly, then this city will not let you down.
Nottingham is a centrally located city in the East Midlands region of the UK. It offers direct access to many of its key destinations and is a popular choice for investors. Prices have increased nearly 20% since 2014. And as the city continues to develop, so too will this property growing trend.
Nottingham comes out on top as one of the best places to buy property if your focus lies with capital growth. The average property price in Nottingham has increased by around 17% in the last five years. This highlights the appeal of Nottingham as one of the top destinations for property investments. Average property prices are around £260,000 and average rental yields of 4.5%. The projected regional 5-year house price growth will be around 23%.
Expect cranes to keep on dominating Nottingham’s skyline in 2020 and beyond as huge development projects progress across the city. Important schemes include the £89 million intu Broadmarsh transformation, Nottingham College’s new £58 million City Hub campus and HMRC’s new Grade A Unity Square office block (opposite Nottingham train station). All these are beneficial to the local economy, creating jobs and attracting investment. This means that the potential future growth for Nottingham is relatively strong.
The average property price growth predictions from Savills reveal a 22.6% increase into 2024. House prices are likely to continue seeing this significant growth. Although a smaller increase is expected in this area compared to property investment hotspots like the North West.
Sheffield is a city and a metropolitan borough in South Yorkshire. Sheffield property investment has grown more and more popular over the past decade. From its university scene to its industrial legacy, Sheffield is known for its rich Northern history.
The city continues to redevelop and improve to this day with a range of major regeneration projects in-store. With a growing population, greater number of people are choosing Sheffield as one of their best places to invest money.
Housing in Sheffield is at the lower end of the scale compared to the other UK cities. Therefore, it offers great opportunities for first-time investors. Rental yields average at 7.3% and the revamp of the city’s shopping district has greatly improved amenities and, in turn, its charm. Average house price stands at £206,227, according to Zoopla. It comes just after Liverpool on the affordability scale.
Property prices get even lower depending on the property type you are looking at. For instance, the average cost of a one-bedroom flat in Sheffield is just £104,255 and a two-bedroom house is £146,165. Again, the average costs of property in Sheffield highlight how the North of the country boasts some of the best places to buy in the UK.
Getting closer to the city centre of Sheffield will result in a reduction in property prices. Properties in the eastern side are also highly affordable. For example, in the S2 postcode you can buy a one-bedroom flat for only £71,944. Investors should avoid the more suburban areas such as those in the S11 postcode, where the average house price is currently a whopping £329,365.
Featuring low property prices and strong rental yields of 5%, Sheffield has displayed a decent property price growth of 11.5% over the last five years. The projected regional 5-year house price growth is strong at 24%.
Sheffield is a fantastic city worth considering if you want to invest in a low-priced property range.
Northampton is a beautiful town located in England’s East Midlands region. It is famous for its history and an attractive place to live in due to its restaurants, shopping malls and industries. In the past, Northampton was famous for its shoe and leather industry. All these make it an ideal location for real estate investments.
Surprisingly, Northampton houses, after their completion or being advertised get sold in just 27 to 33 days on an average. This shows how attractive it is for buyers and real estate investors.
Currently, there are diverse ongoing projects in Northampton related to railway and waterside regeneration projects, worth £20 million. Besides these, expansion of Northampton museum is under progress and a new university campus is also being built.
Some useful insights into the town’s areas are:
- The Abington area features good properties for you to invest. It is at a walking distance from the town centre which makes all of the necessary amenities easily accessible. Properties are in the price range of around £234,000. The population of Abington is over 10,000.
- Wellingborough town is surrounded by 19 villages. It makes it attractive for investors to buy a property for the long term. Population of the area is 49,000 and the average price of a house is about £314,000.
- Wotton is a large village located in the south of Northampton centre and it is the best location for real estate investment. The population of Wotton is around 12,000 with average property prices in the range of £318,000. Cheaper than last year’s price.
- Semilong is also a good place for investment in Northampton because it has affordable prices than in the whole of the district. You can find a nice property for just £139,000, giving you around £775 pcm (per calendar month).
Houses in Northampton have increased to an average price of £236,000. Much higher than past years which shows a sharp upward trend in the property market. Capital gains are also rising at an average of 5.5% per annum.
The shortest time to sell homes and a strong upcoming growth prediction, makes Northampton a strong contender for your investment.
Cardiff is the capital of Wales and the eleventh largest city in the UK. It is one of the UK’s fastest-growing cities. The recent regeneration and infrastructure improvements mean even better connectivity and job growth figures. Average rental yields are between 4-6% and a rapidly growing population means that demand for housing will continue to rise in the upcoming years.
Cardiff is a dense city and also attractive for real estate investors. It is home to three universities including the prestigious Cardiff University. The city is increasingly becoming cosmopolitan since almost a quarter of all the students at Cardiff University are from overseas. Hence, there is a large scope of rental yields due to the rising population of students.
PBSA (purpose-built student accommodation) are in rising demand and the preferred choice by international students. They are usually modern, luxurious and with all required amenities. PBSA demand has increased by 137% since 2011 and still there is only a 2.5:1 student to PBSA supply ratio in the city.
Cardiff is being classed as an emerging market by Knight Frank. It is a city characterised by good universities but low PBSA stock availability. As a result, annual student rents in Cardiff grew by 8.5% in 2017/18. The steepest increase in the UK.
The population of Cardiff is 335,000 and most of them are professionals and students.
Property investment, particularly in the PBSA sector of Cardiff, is one of the fastest-growing choices in the UK for global investors. And you should also be interested to invest in them.
Slough is a large town in Berkshire and located about 20 miles west of central London. It is just 18 minutes from the Paddington station and on the doorstep of Heathrow airport. Slough is one of the largest trading estates in Europe.
Slough is home to the largest number of global corporate headquarters outside of London including O2, Amazon and Mars. It is more than just a dormitory town for London. With a thriving local economy and being named as the best place to live and work in the UK by a recent survey, it is an attractive place for property investors.
Slough is one of the most established towns in the London Commuter Belt. It is a commercial powerhouse worth around £9 billion. Unlike other parts of the South East, Slough’s relatively low house prices, coupled with booming employment, promises a rising property market in the region. Whereas, most of the other areas are experiencing a slump.
In 2018, the average flat in London was for £547,000 as compared with £243,000 in Slough, according to Rightmove. However, in the coming year, London prices remained flat while in Slough, they rose by 4% in the same period. Suggesting that the town’s property market is weathering the uncertainties.
The whole of Slough is good for property investment, still we highlighted some of its ideal locations including:
- Central Slough is the best place to invest due to its location and connectivity with the other areas. The population is of 22,400, mostly consisting of professionals and businessmen. You can find a nice house for £228,000, not bad for a centralised location.
- North Slough is another important area to potentially invest in. Expect to find a reasonable house in the range of £270,000 and £340,000. Though a bit expensive, it is comparatively a better area than the centre.
- West Slough is the most populated area with a population of 35,500. It is the economic hub of Slough. People commute to their jobs and businesses on a daily basis. Its importance is increasing day by day with growing trends. Properties are expensive here, though. Expect to pay between £315,000 and £600,000.
Slough is recognised due to the economy and employment opportunities it offers. Most people are migrating towards this vibrant enough place for a better future. Due to this single reason, global companies prefer Slough, just after London. Companies are contributing a massive £9 billion to the economy of Slough exhibiting its true value.
Thanks to a £1.5 billion regeneration project, improved transport links and a relatively affordable market when compared to London, Slough is a true property investment hotspot to consider for property investment.
How can any list of best cities for property investments in the UK or even Europe (or potentially even globally) be complete without the mention of London.
London is the renowned capital of England and the United Kingdom, and its largest city. Being a 21st-century city, its history stretches back to the Roman times. It is a cultural and global hub filled with all of the famous tourist attractions and endless business opportunities.
It is easy to see why investors would jump at the chance to invest in London property. While London remains one of the world’s most dynamic cities, however, recent figures suggest that property investment in London isn’t the most lucrative route to take.
The property prices in London have rapidly increased over the last decade due to excessive local and international demand of London properties – both from those who want to live in London as well from an investment perspective.
Recently, investors have started looking outside of the capital for more fruitful alternatives. As a result, London investment has seen some disappointing rental yields. Those investing in buy-to-let property in London will get less return on investment than they would if they looked elsewhere in the UK – say in any of the aforementioned cities. In fact, records show that more people are choosing to leave London and take advantage of the housing market, universities and business opportunities up North.
We have seen London’s recovery, somewhat improving. Still, it fails to match the rises seen in the key regional areas which are racing ahead of the national average. They are driven by new levels of inward investment and foreign investment that are creating incredible new developments, outside the already saturated capital.
London property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, somewhat dwindling demand at least in the immediate short-term and slow property price growth in many of its parts. However, London still enjoys somewhat an image of a ‘safe haven’ so many international investors still choose to invest in London.
Bonus 11: Oxford
Oxford is an appealing option for investors due to its vibrant history, a world-famous educational institute and a strong economy. Property price growth may have slowed in the past three years, but it still ranks third for overall growth in the UK over the past decade.
Oxford is an expensive place to live in and the properties are least affordable. The average cost of a house is between £740,000 and £1,130,000, more than eleven times the salaries of the individuals working in it. On the other hand, Oxford is facing a shortage of houses as it needs around 20,000 to 35,000 houses to be built. And the reason for higher rental yields in the city.
Buying a property in Oxford is expensive for the bulk. Though, due to a higher demand and attractive rents of around £1,847 pcm, Oxford is a worthy mention for your investment.
Bonus 12: Edinburgh
Edinburgh has a rich history of culture, education and continuous growth. The most attractive part for property investors is the continued regeneration of the city. This is making it an attractive place to live and invest in.
Leith and Stockbridge are considered to be the top areas of Edinburgh, in terms of the property price growth observed for the last 5 years. Average property prices are in the range of £200,000 and £229,000. Edinburgh has a fairly decent 5-year house price growth prediction of 13%.
The demand for houses is steadily increasing here and you can get a strong capital gain on your property investment.
Is UK property still a good investment in 2021?
Yes. Property is generally considered a ‘safe’ investment globally due to it being a physical asset and there always being demand for it being an essential need item. This is true for the UK as well, especially noting the property supply being far lower than its demand. So, with our list of top 10 cities to invest in 2021, you can easily secure favourable capital gains and rental yields on your property investment.
Where to make your property investments in the UK?
You can invest your savings in the cities from our top 10 list above. It depends on your goals and budget. Expect to earn attractive returns from properties in Birmingham, Leeds, Manchester, Liverpool and Cardiff, to name a few.
Is property still a good investment in 2021?
Yes. UK property has remained a hotspot for many overseas buyers throughout the years and set to continue. In addition, you are likely to be able to find really good deals nowadays as there are people looking for quick sales. This gives you a higher chance to earn significant capital gains in the coming years. Property prices have maintained well even during the current recession due to Covid19 and other pressures like Brexit and the political uncertainty.
Is now a good time to invest in UK property?
Yes. No doubt UK house prices have fallen somewhat according to some indicators, the drop has so far not been as bad as originally anticipated. In fact, there are areas where property prices have risen as well. So it is the best time to invest in UK property because the current situation is in favour of buyers. Properties are facing a flat trend that will soon turn into a sharp incline of property prices as numerous developments in the cities and economy recover.
Best places to invest in property - London 2021
If you’re interested in London property, consider areas such as Ilford, Romford, Barking, Dagenham, Croydon, Harlington and Thamesmead. These areas currently offer average rental yields of 5% and above. Although still more expensive to buy property than elsewhere in the UK, property prices in these locations are still affordable than in, say the other London boroughs.
The UK has faced a lot of uncertainty over the past few years with Brexit and the 2019 general election causing many to question the strength of property investment. With Brexit eventually coming into effect and property prices looking promising after it, the country is now undergoing an additional uncertainty due to the current Coronavirus pandemic.
Arguably, no investment is as safe as a property investment because it offers you a high return along with a peace of mind due to it being a physical bricks and mortar investment. People all over the world invest their hard-earned savings in real estate to get attractive returns on it. While we’re still unsure on the exact direction the property market will take. The key piece of advice to keep in mind is to remember that property is a tangible asset. In uncertain times, bricks and mortar have proven to be the safest place to keep your cash. Unlike other investment types, property is a long-term investment to keep in mind.
With this in mind, it’s important to look at the bigger picture when weighing up whether or not to make a property purchase. Property predictions as a whole show that by 2024, property prices are set to grow by 15% on average in the UK. With even higher growth of 24% in the North West. By backing out of the current opportunities on offer, you could be missing the chance to make lucrative, long-term returns in an ever-growing market.
Zisk Properties can offer you the best property investment offers available in the market. You can find these fantastic property investment opportunities with market beating returns directly on our website. In some cases, we even offer fixed or guaranteed returns. As experts in UK properties, we invest in properties throughout the UK. We also provide suggestions on the best locations for property investments to our clients.
Read our article here to find all of the amazing and simple ways of starting your own property portfolio from just £1,000 and save for your future.