property investors location

Where to look for the next top property investment hotspot

The property investment market has remained active through the events of recent months, but some location choices are changing. While many tried and tested areas are still top of the pack, some newcomers have been added to the mix.

For most property investors, seeking a high-yielding, future-proof investment location is the top priority. In recent years, there has been a growing north-south divide when analysing location prospects. While the south-east and London generally require higher sales prices and lower relative yields, the north and Midlands have proved more popular from an investment perspective.

According to some new research from Select Property, this is largely unchanged. Some of investors’ favourite hotspots still offer the best opportunities. However, there has been a slight shift towards some new areas that could offer good returns. Whether these hotspots will be short-lived remains to be seen, and many investors will still prefer the safety of long-term high performance.

Tried, tested and top

The guide looks at factors such as number of local start-ups, employment rate, average flat value, GVA and house prices.

In the top 10 are some familiar names in the property investment field. Coming in second place and historically a top spot, Manchester is still one of the most promising places to buy property. With a population of more than 2.5 million, the city and surrounding area is thriving.

The average price of a flat there is £198,686, leaving room for capital growth as well as maximum yields. In fact, the average monthly rental yield is extremely high, at 6.14%.

Birmingham also appears in the top 10 list, in fourth place. Similarly, it has a population of more than 2.5 million, and this is forecast to grow significantly. From a property investment perspective, yields are also excellent at around 5.9% on average. Property prices are slightly cheaper, with an average flat costing £179,619. Over the past 12 months, this has actually increased by 10.77% as more investment and regeneration has impacted the region.

Another area that has already been attracting swathes of investors is Liverpool. This appears sixth in the list from Select Property. Here, average flats are even cheaper at £160,622, but this is a rise of 6.59% in the past six months. Liverpool’s yields are famously high, and currently sit at an average 5.83%.

Property investment alternatives

Interestingly, Southampton comes out in first place for a location to buy property. It scored highly for GVA, business start-ups and employment growth, marking it as a promising up-and-coming location. The city has a large student population, and a high number of people living in private rental homes.

Properties are slightly more pricey there, at £214,638 for an average flat. Prices have increased by around 5.66% over the past year, and yields are strong at around 5.15%.

Outer London is another area growing in popularity. As more people migrate away from city-living, it offers the best of both worlds. Sitting third on the list, it has a huge population of almost five million, and 23.85% of properties are private rental dwellings.

In recent years, property prices in London have been levelling off. While it is still a magnet for young professionals and investors alike, many landlords are diversifying away from the capital. Thanks to changing lifestyles as a result of Covid, this trend has been growing as people seek a better work-life balance. For property investors looking for reliable rental homes, while London still has a lot to offer, the north of England tends to reap the best yields as well as the strongest capital appreciation prospects.

At BuyAssociation, we can offer property investment opportunities in a range of excellent locations across the UK. To find out more, contact us directly or sign up for free, early access to our best deals. Our experienced investment consultants can help you choose the best location for your needs.

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