This vibrant city has the largest economy outside of London and the South East, and is home to the largest student population in Europe. There are more 25-29 year olds living here than anywhere else in the UK, bolstering the rental demand throughout the city and the wider areas.
A key driver in the Northern Powerhouse initiative, Manchester is a force to be reckoned with. Its booming economy and major public and private investment plans, coupled with the continual success of its large universities and the demand for housing, continues to put Manchester on the map for both property investors, residential buyers and tenants.
For example, average house prices in Manchester have risen 40% in the past 5 years, from £140,000 in 2014 to £175,000 in 2019 (Hometrack). Manchester is without a doubt the furthest ahead in the property cycle of any of the cities we target for investment deals.
That doesn’t mean to say that every deal in Manchester is a good one. There are some areas of Manchester where prices have peaked more than others, but Manchester is certainly a place that’s on our radar to invest in.
Liverpool is steeped in history and is a key Northern city that we’ve been focused on investing in for quite some time now. Between 1998 and 2016, its economy more than doubled and its population has grown by 5.5% in the last decade alone.
The £1 billion regeneration of the city centre was a game changer for Liverpool and the £87 million redevelopment of the Baltic Triangle has attracted property investors from far and wide due to the capital growth prospects. The addition of Liverpool Waters has also heightened demand from investors keen to replicate the growth they’ve seen in Manchester’s Salford Quays. Liverpool Waters is 2 million sqm of business, leisure and residential space orchestrated by Peel Group who were responsible for MediaCityUK – a development which has completely changed the face of Salford Quays.
Similar to Manchester, Liverpool is incredibly well connected by road, rail and air which are key fundamental boxes ticked from an investor’s perspective. This, along with Liverpool’s ever-growing business districts continues to attract many business HQs, enable job creation and therefore continues to drive a heavy influx of tenants to the city.
Yorkshire is a beautiful part of the world and has fast become the place to enjoy the best of both worlds – vibrant city centres but with rolling countryside on the doorstep. Certain pockets of Yorkshire have piqued our interest for a while due to the ever-growing population here. But our reasonings go much deeper than that…
With over £7 billion of development on the horizon, big things are happening in Leeds.
The South Bank regeneration plan has been huge news for investors keen to predict where the next capital growth hotspot is. This is set to transform the entire South Bank area and is being described as “the biggest change the city has seen in more than a hundred years”. The aim is to utilise 253 hectares to create living, working, and leisure space, and more than double the size of Leeds city centre. This alone is predicted to create over 35,000 jobs and 8,000 homes – that’s one heck of a regeneration plan!
Of course, the transport links in Leeds are already pretty good, but add a HS2 station into the mix and you have the recipe for an investment hotspot to firmly keep your eye on.
House prices in Leeds are still relatively low in comparison to cities like Manchester and Liverpool, but we don’t think this will be the case for long – hence the reason Leeds is on our radar of places to invest in property this year.
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If you’re familiar with the “ripple effect”, you’ll know why we’re looking to invest in Sheffield right now.
The main reason is the price. Prices are incredibly low in comparison to the other cities on our list, and that’s because it’s probably the furthest behind in the property cycle of all the other locations we’ve looked at. This means you’ll find great immediate yields here, but it’ll be a bit longer before you see any significant capital growth.
But that’s fine – we’re in property for the long-term.
This is a chance to buy low and benefit from a strong yield while we wait for the growth to come. And it will come: A £480 million plan to improve The Moor shopping centre is underway, in addition to a £300 million extension of Meadowhall, a £40 million Boeing factory and HSBC investing £90 million in a new city centre office.
Growth lies ahead for Sheffield and it’s certainly a place we’re looking to invest right now so we’re perfectly positioned to benefit from it.
Nottingham baffles us. It’s a cracking location and the only core city in the East Midlands. Many major employers have chosen to call the city their home, including Capital One, Boots and E.ON, and it’s undergoing a huge £250m redevelopment of the ‘Southern Gateway’.
Its ever-growing economy in addition to having two major universities is a huge draw, and property prices are pretty low.
Yet despite all this, it’s still not on the radar of most property investors.
£1 billion has already been invested into the transport infrastructure to improve the tram network and Nottingham also has one of the greenest bus networks in the UK – another fundamental box ticked.
The HS2 station planned to be housed on the outskirts of Nottingham will also heighten the appeal for many property investors.
While the area has quietly flown under the radar, we’ve been investing in Nottingham for years and have benefited from both strong yields and growth – but we firmly believe there’s much more to come from this vibrant city.
Birmingham is a city with oomph! House prices here have really steamed ahead over the last 12 months and once HS2 arrives, it’ll be one of the most well-connected cities in the UK – something many investors have already spotted.
The amount of investment going into this city isn’t something to ignore – its already had a £600 million injection to reopen New Street Station, a £150 million shopping centre and a £50 million upgrade to The Mailbox – but there’s more on the way.
Birmingham Airport has recently unveiled its final master plan involving a £500 million expansion. This will see passenger numbers increase from 13 million to 18 million, something which is anticipated to bolster the local economy by a whopping £2 billion.
Transport links are important to the city, mainly because it already has a booming population of around 1.1 million. And because of its super-connectivity, this is expected to increase to 1.3 million over the next 20 years – strengthening the demand for property in the city.
We’ve told you about the locations on our radar – but what about the ones that aren’t? We’re often asked “why aren’t you investing in [random location] here” and that’s usually not a one word answer.
When we’re looking for the best places to buy investment property, we’re looking at fundamentals, demand, future plans for the area, property prices – the list goes on.
We think cities like Newcastle and Sunderland are ones to watch – just not right now.
Newcastle in particular will be interesting over the next 5-10 years. It’s already home to two world-class universities, is a dedicated “science city” and has not one but four National centres of Excellence.
Big businesses such as British Airways, Nestle and P&G have set up base here to tap into the 1.1 million population that reside just 30 mins away from the city centre.
Newcastle International Airport connects the city to over 85 worldwide destinations and you can also get to London via train in less than 3 hours.
Sounds good, right?
But despite everything Newcastle has going for it right now, it’s just a tad too early for us to consider investing here. We believe cities like Sheffield and Nottingham offer current rental returns that are nearly as high, yet will get stronger growth more quickly as the property cycle develops.
Newcastle will almost certainly appear on our list of targets in the next few years, but at the moment we believe it will involve waiting longer than we’d like to see the benefits of capital growth.
In a stark comparison to the North East being too early to invest in, the boat for the South East has sailed. If you’ve not invested in the South East already, we think it’s just too late.
Property prices have skyrocketed here over the past 5-10 years, leaving very little room for investors to benefit from future capital growth.
The demand for buy to let investment property in many areas of the South East pushed prices up to such a point where investors paid very little attention to yield in favour of capital growth. In fact, many investors were taking the hit and barely breaking even on investment deals here – solely relying on growth alone.
Now growth has stagnated and investors who weren’t lucky enough to get in early are very lucky to achieve a 3% yield at best. Prices have cooled and remain largely unaffordable for most, which means that we won’t be focusing on investing in the South East again any time soon.
That’s a wrap on your insight into where we’re investing in buy to let property and why. There’s also a handy video on our top buy to let hotspots over on our YouTube channel.
It’s worth remembering that not every property in our top locations will make a good property investment deal. Due diligence is your best friend – so make sure you do your research.
Finding the right city is just the beginning. Finding the right property deal can be the difference between a good and a bad investment.
If you’d like more information on where to focus your attention, you can book a free goals call with our team to get clear on what you want to achieve with investment property.
If you’ve read enough and are ready to invest in property, you can book a detailed strategy meeting with our invest team.
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