We’d all love to be able to predict the future of the property market and know exactly which are the best locations in the UK to invest in property for 2019. In the mid-1990s, few residents of Lambeth would have guessed their tired Victorian villas would soon be among the best places to invest in property in the UK. Pre-Millennial dinner party discussions about where to invest in property probably didn’t even mention Hackney, yet prices in this borough have risen by over 750% in the last twenty years.
Today, it seems clear that many of the UK’s best buy to let areas are located north of the Midlands. But which towns and cities should you consider?
We’ve trawled through house price reports and spoken to local experts around the country, building an authoritative picture of towns and cities that combine affordable prices with healthy scope for capital appreciation.
And we’re putting our money where our mouth is too: these are the areas that we’re targeting for our own personal buy to let property investments, and where we’re aiming to acquire development sites.
So: below you’ll find the Property Hub’s tips for the best places to invest in property in the UK…
And once you’ve finished digesting this, you can head on over to watch our free video guide on the best places to invest in buy to let property this year.
1. Greater Manchester
You should know by now that property prices in Manchester city centre have exploded over the last few years. And it’s not just property: the city has been transformed, and is now one of the most vibrant and exciting places to live in the whole country.
The city centre is still a strong place to invest in property now, but it also opens up opportunities in the surrounding areas.
This is the same “ripple effect” (which we’ve covered on our Property Podcast) that we’ve seen in London in the past. After the last crash, prime London was the first to recover – and as prices rose, the growth gradually rippled further out until it reached the Home Counties.
We believe the same will happen in Manchester – and there are so many areas set to benefit. From Wythenshawe to Stockport to Bolton, there are places to keep your eye on all around Greater Manchester. Look for places on the tram network for easy commuting into the centre to benefit the most.
Of all the areas we’ve identified, Greater Manchester property investment seems like the safest bet for investors in 2019: it’s already moving, but there’s a lot further to go.
Liverpool rightly takes one of the top spots in our best places to invest in property, particularly if you’re focused on investing in the North. It’s a city with loads to offer in its own right, and will also benefit from the Manchester ripple effect.
Despite massive regeneration of the city centre, prices in many areas haven’t recovered past their 2008 prices – meaning that in real terms, you can buy in at a lower price than you could have done over a decade ago.
As a result, yields for investors are strong too. They vary by area of course, but on the whole yields are higher than in Manchester or Leeds.
And there’s more regeneration in Liverpool still to come. Not only is Liverpool part of the Northern Powerhouse, the Liverpool Waters project is finally starting to move after being talked about for years: along with the Wirral Waters scheme on the other side of the Mersey, it will be one of the UK’s biggest regeneration projects. It will transform a huge area surrounding the old docks, and include a new port and cruise terminal.
The company behind Liverpool Waters is The Peel Group, who are responsible for The Trafford Centre and Salford Quays in Manchester – so their pedigree couldn’t be much higher.
As with all cities there are still areas you’ll want to avoid, but we see big opportunities for property investors in Liverpool in 2019.
Liverpool property meetups are held every month and they’re a great way to discover more about this cracking location.
House prices in Leeds haven’t picked up as much as some other areas (most noticeably Manchester) since the last crash. Largely, this is due to a myth that’s affected the city since 2008.
Around 2006 and 2007 there was a construction boom in Leeds, with thousands of new apartments being built. Unfortunately, most were completed around 2008 just as the economy collapsed – so the anticipated demand wasn’t there, and prices collapsed too.
This led to the persistent idea that there’s an over-supply of accommodation in Leeds – so very little has been built since. This was true 10 years ago, but the population of Leeds has grown faster than any city other than Manchester.
A fast-growing population (seven times faster than London, in fact) and very little construction means that an over-supply has become an under-supply.
So far, pension companies are the only people building at scale in the city – but we believe it won’t be long until other developers and investors catch on.
On top of that, there’s over £7 billion of development in the pipeline for Leeds which makes it a great place to invest – including an enormous regeneration project on the South Bank around the future HS2 station.
Sheffield is another contender for the Manchester ripple effect. Of all the cities we’ve looked at so far, it’s probably the furthest behind in the property cycle.
This means that prices are low – shockingly low, when you look at what you can buy an apartment for in the city centre. The centre itself has already improved dramatically, and there’s a lot more on the way: The Moor shopping centre alone is having £480 million spent on it, HSBC is opening new offices, and there are two luxury hotels being developed.
Is 2019 too early for significant price movement in Sheffield? You’re unlikely to see big gains this year, but it offers the opportunity to buy in at a great price – locking in strong yields, and allowing you to benefit from the growth that we believe is ahead. Sheffield is a buy to let property investment hotspot to watch!
Nottingham is bizarrely missing from the radar of most property investors. When you look at its central location and what it has to offer in terms of employment and leisure, its prices are just too low.
The city centre is a great place to live, and – much like Leeds – there has been minimal new construction. It also has a well-balanced economy with major employers in multiple industries, as well as having two major universities with tens of thousands of students.
The effective and extensive tram network offers opportunities outside the city centre too. Yields are strong both in and out of the centre, but price growth is likely to be strongest in the city itself.
Over the past 12 months, house prices in Birmingham have risen faster than any other UK region, so it’s only right that it makes our list as we highly rate Birmingham as a great location for investment. Once the eagerly awaited HS2 makes its debut, Birmingham will easily be one of the most well-connected cities in the UK. Add this to a 1.1 million population which is expected to grow to 1.3 million by 2039, and you have a pretty top-notch location on your hands.
The amount of action in this vibrant city is positioning Birmingham for some incredible capital growth over the next few years too – it’s already benefitted from a £600 million reopening of New Street Station, a £50 million redevelopment of The Mailbox and the £150 million Grand Central shopping centre. Not to mention the fact that the city is also home to over 32,000 businesses making it a major player in the employment stakes – this is a hotspot which ticks every single box.
7. Manchester city centre
We’ve already mentioned Greater Manchester on this list but we also had to include Manchester city centre as a great place to invest this year.
The city centre has had a vast transformation over the past few years and low stock levels coupled with such high demand have made Manchester a desirable place to invest. House prices here have continued to rise and rental yields are great due to the high tenant demand.
It’s a thriving employment hub which, combined with fantastic transport links, makes for a vibrant and bustling city centre with a great social scene – something in high demand, particularly with young working professionals.
Manchester city centre has appeared in many buy to let hotspot lists over the years and 2019 is no different – there’s plenty more to come from this thriving location.
Not any property in any part of these cities will be a good investment in 2019. Buying in a location that’s primed to do well gives you a big head-start – but that doesn’t mean you can over-pay or scrimp on your research.
Most importantly, don’t chase the highest yields and target the cheapest properties you can find. They’re likely to be in less desirable areas that will have below average growth, and could well appeal to tenants who’re more more likely to cause you trouble too.
Identifying the right city to buy in is important, but this is just the first step: don’t relax your standards, especially in an area you’re not familiar with.
Now take the next step in your research
We’ve put together a free course where you can learn more about each of our chosen areas, and find out how to translate your new knowledge into action.
Watch the course now