Choosing the right location for your property investment is one of the most important steps to consider, as it can ultimately make the biggest difference to your future returns.
While it’s not possible to predict the future, the art of successful property investment involves an element of speculation, while keeping an eye on the long-term future of your assets. Seven Capital has compiled a list of the top 10 places you should consider investing in across the UK, based on projected rental yields, capital growth, local demand and supply, and regeneration projects both planned and underway.
Birmingham, Liverpool and Manchester topping the list
The results demonstrate a continued shift towards some of the emerging regional areas of the country. Coming at the top of the list is Birmingham, which has seen a 19.3% rise in house prices since 2014 and is already one of the most popular places in the UK to invest in property.
Seven Capital cites Knight Frank’s prediction that prices will rise a further 12.5% by 2022, while yields, which are currently between 4.4% and 5.3% (PropertyData), are expected to remain strong alongside growing demand for rental property in the city.
Next on the list were Liverpool, which is well known for its high rental yields, and Manchester which continues to be one of the top places to invest outside London – highlighting the strength of the property markets in the north-west of England.
The top 10
Better yields in the north
Seven Capital states that typically, the further north you go the higher your rental yields will be.
“Looking at the properties priced over £100k delivering the highest rental yields, we can see that the four postcodes in the ‘Northern Powerhouse’ take the top spots,” says the report, listing L1 in Liverpool, S1 in Sheffield, M14 in Manchester and LS6 in Leeds as the locations with the highest rental yields in the country (PropertyData).
However, the report also warns: “Just remember, a high rental yield doesn’t tell the full story. Tenant demand is just as important, so jumping into an area with a high rental yield on paper isn’t always the best tactic.”
Where have prices risen the most?
Using HomeTrack data, the top five places to have seen the highest capital gains are Liverpool, Birmingham, Cambridge, Glasgow and Leicester. Liverpool saw the most impressive gains over the past three months of 2.6%, well ahead of London’s 1.1% growth over the same period, while its 12-month gains were 4.6% on average. Birmingham achieved 2.1% house price increases over the past three months, with 3.8% over the past year – and this growth is one of the reasons the two cities have made it to the top spots in Seven Capital’s list of places to invest in 2020.
BuyAssociation holds a number of investment opportunities in many of the key investment hotspots in the UK. Take a look at our investments page and get in touch for more information.