The UK is home to a constantly shifting housing market. It never stands still for long, and as many investors will know, you have to take every chance you get before it slips through your fingers.
It’s a landscape that ripples with change, constantly affected by migration, hybrid work, regional regeneration, government schemes, affordability, job availability; the list goes on.
The real question any mortgage advisor, developer or investor should be asking themselves is “where should I invest in property that will balance short-term returns with long-term growth potential?”
Unfortunately, if this question were easy to answer, we’d all have great investments that make lots of money. However, it’s certainly not impossible to come close to giving a good answer.
The key is having the ability to identify locations that are performing as desired in the now, but are also positioned for sustainable growth in the future.
Along with the ability to maintain performance, or even head in an upward trend. But how do we determine this?
Here we will break down 5 locations that are primed for capital appreciation, rental demand and regeneration. For UK buyers looking for the best place to invest in property, we’ve got you covered.
Let’s dive in and discover some key ways you can identify the perfect property to purchase for your portfolio.
Strategically Choosing Locations
Looking at the price per square foot of local areas, previous sale prices, and desirability factors is a great place to start and offers effective ways to use data to unlock smart investment opportunities.
For example, to uncover the following 5 cities that made our list of the best places to buy, researching the following areas and compiling them with the aforementioned information will offer a superb data set for decision making.
Strong Rental Yields and Affordable Entry Points
Finding a location with affordable houses means you can affordably rent your property out, thus attracting many more potential renters.
It’s not all about high profits; consistency is key! You’ll be investing in a more manageable amount now, for a higher return in the future.
Robust Infrastructure Plans
When looking into a potential location, check for infrastructure projects and upgrades that have not yet been completed, or even started.
New train stations, bus line improvements, cycle lanes, etc., will all improve the overall value of an area. A little foresight can make your purchase one that will be worth a lot more in a few years.
High Tenant Demand
Check for things like schools and universities expanding their student numbers, or keep an eye out for large office buildings bringing new businesses into the area.
If you can target a need for housing from a specific market, you’ll have a much easier job refining your search.
Regeneration Schemes
Regeneration projects in this modern age can take cities and towns from past generations and bring them into the 21st century.
With the goal of pedestrianisation, smart city tech, and infrastructure improvements in mind, these schemes can revolutionise an entire area.
Keep an eye out for locations launching projects to pedestrianise areas, build parks and improve public amenities, as these are all things that improve ‘curb appeal’ and locational desirability.
Real Economic Growth
This may sound obvious, we all want economic growth in our investments, but we aren’t talking about housing prices here; we’re talking about the area’s actual working economy.
A few questions worth asking yourself:
- Are businesses thriving?
- Are they closing down or moving away?
- Are there plenty of independently owned businesses?
If the people in an area have strong, stable incomes and job opportunities, your rental property will likely benefit too.
Lifestyle Appeal
This is crucial as people aren’t just renting a home, they’re renting the area that comes with it. Ensure there are lots of amenities nearby, or soon to be amenities.
6 UK Cities Turning Heads & Profits
So, using the above criteria, we have established 5 options where purchasing property in or around the area will be sure to offer up superb returns, maintain (or increase) in value, and fulfill all the requirements for any property portfolio.
Let’s take a look at the best up and coming cities in the UK for any investor.
1. Birmingham: A Regeneration Giant
We’re all familiar with HS2 and don’t worry, we’re not here for all that right now.
What HS2 means for Birmingham in particular is guaranteed infrastructure investment, wonderful future connections to the capital and plenty of housing and redevelopment projects.
On top of this, further solidifying its position as the best place to buy outside London, the average property yield is consistently over 5% for the whole city, placing it above the national average.
Average property prices remain accessible compared to other cities, whilst the tech, finance and creative industries are booming; not to mention the population from five universities.
Birmingham will remain one of the best buy to let areas over the coming years, and probably beyond.
2. Leeds: A Northern Powerhouse in Motion
Leeds is no longer an up-and-comer with potential; it has arrived.
It’s the largest legal and financial hub outside London, has a thriving digital sector and flagship regeneration projects like South Bank that are nearing completion. Leeds ticks every box on the list of criteria.
It’s an incredibly desirable city for young professionals or city centre tenants, there is a huge university population and there are some incredibly affordable areas that are superb entry points; average house prices hover just below the £250,000 mark.
With a mix of affordability, innovation, infrastructure and incredible culture, Leeds is surely one of the best places to invest.
3. Liverpool: Affordability Meets Ambition
Liverpool offers the rare and exciting combination of high yields (7-8% in certain areas, according to PropertyData), low entry prices and long term urban regeneration plans.
It’s a city of extreme change that looks unrecognisable from its form two decades ago, and will look completely different in another two decades’ time.
It’s a place that appeals to remote workers, young professionals and creatives due to its gorgeous architecture, amazing infrastructure and proximity to so many desirable locations, making it one of the most exciting up and coming cities in the UK to keep firmly on your radar.
4. Newcastle: The North East’s Rising Star
Newcastle is often overlooked in favour of its northern cousins, but it has quietly been working away to become a rental hotspot. It holds incredible strategic importance as a transport hub, a student city and is a life-sciences cluster which enforces its solid foundation for growth and guarantees plenty of stable jobs.
Despite stunning architectural, infrastructural and regeneration projects in the city centre, prices remain very affordable and yields are amazingly high, regularly exceeding 6%.
There are ongoing investments in smart-city tech that will appeal to younger generations, riverside living is expanding, and healthcare innovations make Newcastle a strong and silent contender for the best places to buy rental property in the UK.
5. Huddersfield – The Commuter Sweet Spot
If ever there was a hidden gem in the housing market, it’s Huddersfield. It perfectly blends university town energy with commuter convenience to both Leeds and Manchester, whilst maintaining that all important low property price.
There are some pretty extensive regeneration projects in the works and the town’s profile with buyers and renters alike is getting ever stronger.
For those seeking stable, mid-market buy-to-let opportunities, Huddersfield offers 6-7% yields and consistent tenant demand due to a high working population, making it one of the most quietly promising areas in the northern market.
Final Thoughts
The UK property market is increasingly decentralised, giving rise to investment opportunities and property hotspots across the country.
For landlords, developers, portfolio managers and financial advisors, now is the time to leave the constraints of the M25 and reassess what a prime location actually is.
Renters are focusing more on their wellbeing, their ability to work from home and placing more importance on the areas in which they live than ever before. If you factor in the improvements major cities all around the UK are making in terms of infrastructure and transport links, then it’s a pretty powerful concoction.
These five cities offer a blend of value, vision and steadily increasing velocity; perfect for forward thinking investors thinking about where to invest in property for the best results.
Whether you’re advising clients, making an investment for your future or expanding your own portfolio, the smart money is already moving to some of these cities, so don’t get left behind.