The UK property investment landscape continues to attract plenty of interest both locally and overseas, so what do the key cities have to offer?
Diversifying across different locations can be a successful investment strategy for property investors, who then benefit from the varying returns and levels of capital appreciation on offer across the country.
Many investors who had historically focused on London have increasingly looked further afield in recent years, especially as housing markets in the North and Midlands have rapidly overtaken the capital, although London remains an option popular.
The north-west town has long been a favorite location for property investment in the UK, with strong rental yields, positive house price growth and major regeneration making it a more attractive place to live for tenants. More than half a million people know how to live in the city.
The buy-to-let sector in Manchester is booming and has repeatedly been recognized as the ‘best place to own’, including in a report by online comparison portal GoCompare.
Property prices in Manchester have risen more than most other major cities over the past year, boosting its appeal as a UK property investment destination for those looking to make some money through capital appreciation. The average house price in Manchester city center is now £258,442 according to Rightmove.
According to Fleet Mortgages, it is also one of the areas with the highest yields. The average yield for a one-bedroom apartment, according to RW Invest, is 6.59%.
Another hotspot in the North West, Liverpool is notably ahead in terms of rental yields compared to many other property investment options in the UK. According to Track Capital, returns can be as high as 6.9% in some regions. In the past, the city’s zip codes were among the best rental yields in the country.
The city’s large student population makes it a popular rental area, but the city is increasingly attracting young professionals and older renters. Its downtown population is growing rapidly, as is the number of startups attracting talent.
Apart from that, the cultural aspect of Liverpool makes it an extremely attractive prospect for buyers, investors and tenants. One of the main areas of regeneration at the moment is the historic waterfront, which is well advanced and allows residents to take advantage of the riverside location close to the center.
House prices in Liverpool are also attractive to investors, being well below the UK average at around £193,383 according to Rightmove.
Another city with exciting regeneration prospects, Birmingham has benefited from investment around the Commonwealth Games, as well as the upcoming delivery of HS2 which will significantly reduce the journey to London. This has raised its profile as a UK property investment target.
Housing prices have risen rapidly in some areas, and further increases are expected, especially in areas that stand to benefit from the arrival of HS2 and other development projects.
Currently, Rightmove estimates show the average property is £210,223, with wide variations across the city. According to Zoopla, rental yields in Birmingham average 6.56% for rental landlords.
An important aspect that has attracted increasing numbers of people to live in the city is the number of major companies that have opened or expanded offices there in recent years, including HSBC and Deutsche Bank. It has also led to an influx of people leaving London to move to the city for a better quality of life.
Although property price growth has fallen in the capital in recent years, it is still a solid and popular prospect for many considering investing in UK property. Rightmove figures currently put the average price at £708,713, but there are huge variations between areas and property types.
The build-to-let sector is particularly strong in London, as it is home to the largest number of units by far. Tenants looking for longer-term community apartments with common spaces, often better facilities and ideal rental locations are increasingly attracted to the rental-to-build model.