Best Buy to Let investment areas outside of London
January 24, 2019
This may not come as much of a surprise to anyone but property in London is expensive. Despite the recent slow down in property prices as the uncertainty around Brexit continues, buying property in London still requires a significantly bigger budget than investing in the rest of the UK.
Looking a little further afield may offer the most fruitful prospects for the UK’s buy-to-let investors. Lower value properties in the Midlands and the North offer significantly more attractive rental yields. This is not only promising for ROI but may provide great, cost-effective opportunities for first time investors to enter the buy-to-let market.
So where exactly are these greener pastures? And which areas outside of London offer the best prospects? Here are our four top picks for the best buy-to-let areas outside of the capital…
Best Buy-To-Let Areas Around The UK
- House Prices – capital appreciation has been very promising in Nottingham in recent years. In the last year alone, house prices have increased by almost 6%. At approximately £154,00, average house prices in Nottingham are far lower than the UK average of £217,000. Nottingham properties are therefore well placed to make considerable profits for buy-to-let investors.
- Rental Yield – net rental yield in Nottingham increased from 5.6% in 2017 to 6.2% in 2018, one of the main reasons that ThisIsMoney ranked it joint first in its top 10 list of buy-to-let hotspots in 2018.
- Demand – with two large universities attracting over 60,000 students each year, a steadily growing population and a sluggish nationwide construction industry, it’s safe to say that demand will remain high for buy-to-let properties in Nottingham for the foreseeable future.
- Investment – with the council’s Nottingham Economic Growth Plan, a £250 million Southern Gateway redevelopment and an increased focus on emerging sectors with highly skilled workers, Nottingham is set to sustain record-levels of investment into its burgeoning economy.
- House Prices – with average house prices at around £120,000, property in Liverpool is significantly cheaper than the UK average. House prices have also seen a similar increase in value to Nottingham with a rise of 5.3% in the last 12 months.
- Rental Yield – Liverpool shared the top-spot with Nottingham in ThisIsMoney’s 2018 buy-to-let hotspot for rental yield list. Although net rental yield increased at a slower rate in the last 12 months (from 8.0% in 2017 to 6.2% in 2018), it still tops the UK list for best returns on a rental property.
- Demand – another vibrant student city, Liverpool has no less than four universities with over 70,000 students. Its population has steadily grown by around 0.77% each year for the past eight years. With a growing population and a reliable supply of student tenants, demand for rental properties in Liverpool with remain high over the coming years.
- Investment – Liverpool is currently undergoing major regeneration projects, from the £1 billion Knowledge Quarter scheme to the £350 million LS SuperportKnowledge Quarter scheme to the £350 million LS Superport, Liverpool is gradually being repositioned as a city at the forefront of British industry and innovation.
- House Prices – Sunderland’s average house price is currently around £113,000. This is makes it the cheapest property area on our list. Property prices increased by 2.6% from 2017 to 2018, demonstrating slight but steady growth in Sunderland property value.
- Rental Yield – the low cost of property in Sunderland means it has one of the best rental yields in the country, currently at 7.53% according to TotallyMoney.com.
- Demand – While the population of Sunderland has floated around the 175,000 mark over the past decade, the lucrative theme of low property prices combined with strong demand for rental accommodation in student cities continues with Sunderland.
- Investment – with over £1.553 billion worth of private and public investment by 2024, it’s safe to say that Sunderland is a city set to play a big part in the Northern Powerhouse. The new £117.6m Northern Spire Bridge that opened in 2018 is just the start of efforts to improve Sunderland’s transport links and bolster the local economy.
- House Prices – the average price of property in Newcastle is around £161,000, much lower than the national average and significantly cheaper than London. In the last 12 months, property value in Newcastle has increased by 4.1%.
- Rental Yield – the average rental yield in Newcastle is around 8%, with the NE6 postcode having an especially high yield of 9.48%. This makes Newcastle upon Tyne one of the best areas for rental yield in the UK.
- Demand – Newcastle is a growing magnet for young professionals and students, with over 60,000 students attending two leading universities. Its population has more than doubled since 2002, meaning it currently ranks in the Top 10 UK cities for growth in the 21st century.
- Investment – Newcastle’s economic potential is being realised with many exciting investment programmes, including the £92 million Accelerated Development Zone, the £100 million The Giant’s Quay development and a £350 million research facility called Science Central.
Property Investment Strategies
As economic uncertainty and London’s inflated property prices endure, we’re seeing a growing interest in low value, high yield property. This real estate allows for better returns and bigger portfolios, but your investment strategy may be different. For example, you may want to focus on capital appreciation, or you may prefer to hedge your pension on a more stable asset type, you may just want to prioritise a location-based strategy that makes it easier for your children to manage your financial legacy. Whatever strategy you choose to pursue, make sure you research your options and always be alert to the advice of industry experts.
There is a world of investment opportunity outside of London with many areas offering high yield buy-to-let rental properties to the astute investor. Check out our current properties in Nottingham, Liverpool, Sunderland and Newcastle today or get in touch with our friendly and knowledgeable team to discuss your investment options.
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