by Ben Luxon June 21, 2019 5 min read

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The UK property market has slowed down over the last year. With uncertainties around Brexit playing a big part, no doubt. However, whilst London prices may have dropped by 0.5% over the last 12 months, this doesn’t mean that the rest of the UK is doing the same. In fact, there are a number of areas in the UK which are still showing strong growth. But does that make them good areas for investment?

We did a bit (alright, a lot) of research into the market whilst writing this article up, and there are a lot of mixed stats and misleading facts out there. We’ve collected a selection of data, talked with some professional real estate investors, and made our own inferences into the best areas for investment in the UK.

Here’s what we’ve looked at to determine the best potential investment areas:

1) Housing Cost

You don’t want the property to be outrageously expensive, but neither do you want it to be ridiculously cheap. Somewhere in the middle is where you can make good capital gains and make a profitable rental yield.

2) Year on Year Market Growth

The UK housing market has flat-lined slightly over the last year. With uncertainties around Brexit alongside an understandable slow of the explosive value growth since 2009/10. However, there are plenty of regions in the UK which have continued to perform well over the last year and are well worth putting on our watch lists.

3) Average Rental Prices

Being able to charge a rent that allows you to turn a profit is a pretty vital part of having a rental property. However, high rents don’t necessarily mean profit. You need to be able to balance your outgoing costs with average rent prices - as well as expect decent capital gains down the line.

4) Active Market

If nobody can sell their properties then that’s a problem for investors. It suggests the demand isn’t there and property values will drop. On the other hand, areas with fast sale periods suggest there is high demand in that area.

5) Speculative Market Growth

The final part is speculative. What areas we think might do well from our analysis of current trends and a few other factors that you simply can’t get from the stats.

invest buy to let london

Best year on year growth UK

City

Average House Price

Year on Year growth %

Growth Last 3 Months %

Glasgow

£125,200

5.1%

2.1%

Leicester

£177,500

4.9%

0.5%

Liverpool

£122,100

4.9%

2.6%

Manchester

£169,700

4.5%

1.4%

Nottingham

£154,500

4.5%

2.0%

Sheffield

£138,600

4.4%

1.3%

Birmingham

£165,500

4.3%

1.9%

These stats are based on cities in the UK. We’ve just taken the top seven with over 4% growth year on year.

Source: hometrack.co.uk

Highest Value Property UK

City

Average House Price

Year on Year growth %

Growth Last 3 Months %

London

£482,800

-0.5%

1.1%

Cambridge

£424,300

-0.2%

0.8%

Oxford

£409,900

1.8%

2.1%

Bournemouth

£289,900

1.0%

0.7%

Bristol

£280,300

2.5%

1.6%

Portsmouth

£239,500

1.0%

1.5%

Edinburgh

£227,700

4.0%

0.4%

Again just looking at the cities in the UK, this list leaves off a few towns like Guildford who also have average property prices in excess of £400k.

Source:hometrack.co.uk

Most expensive places to rent

Town

Average House Price

Average Monthly Rent

Guildford

£466,000

£1,032

Brighton

£397,000

£1,045

Bath

£366,000

£1,070

Oxford

£409,900

£1,236

London

£482,800

£1,418

These prices are indicative of one-bedroom rentals in these towns/cities. These are some of the most expensive places to rent anywhere in the UK.

Source: Coopinsurance.co.uk

Fastest Moving Areas

Town

Average Days to Secure and Offer

Average price of property sold

Falkirk

27

£154,579

Edinburgh

27

£298,575

Glasgow

31

£186,705

Stirling

32

£222,736

Cardiff

37

£255,582

Coventry

37

£215,909

Newport

40

£187,842

Nottingham

41

£207,456

Birmingham

41

£207,474

Mansfield

42

£156,763

These stats show the speed with which houses on average received and accepted an offer. The faster the offer the higher demand likely is in that area.

Source: Zoopla.co.uk

Speculative Growth

invest buy to let london

Manchester

Manchester property has been on the up over the last year. It’s not just the property prices though. The city has been transformed in recent years and is now a vibrant and exciting place to live. Because of this, the population growth is one of the fastest places anywhere in the country and with that comes increased demand. However, the average house price is still way below what it could be.

It’s not just the city centre though. With the public transport and tram systems in place, the areas surrounding Manchester are getting ever more accessible and remaining affordable and this offers a unique investment opportunity. The prices are already moving up in the suburbs, but we reckon there’s plenty of room for an investment opportunity.

Leeds

House prices in Leeds haven’t picked up as much as they should have done. A big part of this is because there was a large amount of development that was completed around 2008. When the crash happened house prices dropped as the demand for property just wasn’t there at that time.

However, this was over 10 years ago and the population of Leeds has grown massively.

On top of this, there’s over £7 billion of development in the pipeline for Leeds which makes it a great place to invest – including an enormous regeneration project on the South Bank around the future HS2 station.

Sheffield

Sheffield makes it onto our speculative list for a couple of reasons. Booming year on year growth alongside under-valued property. Plus it’s close enough to Manchester to be a contender for commuters into the bigger city.

There’s also a lot of development and new jobs coming to the city with big investment in the Moor shopping centre and from HSBC. It’s unlikely for the prices to shift this year but there’s potential for some big gains - which makes it a spot to watch.

Nottingham

Nottingham seems to often be missed when people are scouting places for investment properties. Which we think is a bit of a mistake. The city centre is a bustling lively place which has a lot to offer by way of jobs and leisure.

It has had a pretty good year, with average property prices jumping up 4.5%, plus it is one of the areas with the fastest moving property in the UK showing there is definitely demand. Despite this, the average property prices are low - surprisingly low.

It also has the advantage of two major universities as well as a newly developed tram network that offers opportunity outside the centre too. Yields are strong both in and out of the centre, but price growth is likely to be strongest in the city itself.

Conclusion

There are a number of other areas that could and perhaps should have made it onto our speculative list, but as we say it’s all speculation and too much of such a thing could be less helpful than it should be.

Stats can be misleading and often correlation does not mean causation. However, hopefully, you have gotten a broad overview of some of the key stats in the housing market in the UK over the last 12 months.

Before making any final decisions, in-depth research into the area is vital. You will want to look into population growth, current and future development, and employment levels to name a few things. Plus, it’s always worth going and getting a feel of the town or city in person. Is it busy or quiet? Does it feel safe? Are there a lot of closed shops on the high street? These things can be good indicators of the life of a town and help determine whether your investment, like the town, will thrive or die.

Let us know your thoughts on the best UK investment opportunities in the comment section below.

Further Sources:

We hope you found this blog interesting! However, do note that it should not be used as a substitute for competent legal and/or other advice from a licensed professional. 

Ben Luxon

"Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks. His love of travelling has taken him to over 10 countries in the last year, where he has sampled the craft beer of them all."



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