Which UK Cities are Property Investors buying in?

There is good news for those looking to invest in UK Property as attractive opportunities continue to emerge in various UK Cities where potential for growth meets high yields and strong rental demand.

Despite difficult conditions for property investors over the last few years, the market offers encouragement and positivity for those looking to expand as rents and yields rising faster than house prices provides great opportunities for investors.

Property values in some of the UK’s major cities saw a rise of 2.1% in the year to May 2019. Performance across different regions and cities can vary hugely, so it is advisable for prospective investors to research and conduct due diligence. While prices rose by 2.1% on average, there is a great deviation across different cities, with prices in Liverpool rising by 5% and those in Aberdeen falling by 4%. 

Liverpool property prices led the way with an increase of 5%, while strong growth was also demonstrated in Belfast (4.6%), Manchester (4.3%), Edinburgh, Birmingham & Glasgow (all 4%).

According to the land registry, in the five years up to June 2018 Liverpool’s average property price increased by 19.34% while in Manchester prices increased by 47.76% over the same period of time.

Latest figures show that rental rates on residential property in the UK are increasing at their quickest in more than two years, resulting in average yields for property investors rising to 4.5%, the highest average since 2017. The average Long term rental yield for properties in Liverpool is 8.3%, while Manchester’s landlords are achieving a very healthy 6.5% on average.

A range of factors has led to an attractive environment for property investors and landlords in Northern Cities.  Manchester, for example has a fast growing population, robust infrastructure, prime transport links and increased tourism, all leading to forecasts of continued growth.  Research from EY suggests that Manchester and other Northern Powerhouse cities have drawn some of the largest investment from Foreign investors outside of London.

Over the past three years Birmingham has seen a 23% increase in house prices in the last 3 years, while the region is forecast to increase by 15% in the next five years with a growing young population and many large employers such as Deloitte, PWC and HSBC relocating to the region.

In addition, cities such as Leeds and Newcastle continue to attract property investors. Real Estate Advisors JLL forecast growth of 17.1% by 2023 in Leeds, with strong demand and limited supply creating attractive long term prospects for investors.

The Buy to Let Britain report produced by Kent Reliance states that landlords expect a continued uplift as the private rented sector grew in size by £6 billion over the last 12 months. With very little growth in the number of rental properties (0.2% per year) this emphasises how such demand for rental properties has led to an increase in rental rates.

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