Top 7 Best Places to Buy Investment Property in the UK

The slow economic recovery that started in 2021 has created some new opportunities for buy-to-let investors. The increase in rental demand along with rising rental prices are two of the driving factors behind landlords looking to buy more property.

If you’re looking to expand your portfolio, this guide will walk you through the top 7 best places to buy investment property in the UK in 2022. As data from the National Residential Landlords Association (NRLA) shows – 57% of private landlords reported that demand for private rentals increased in the third quarter of 2021. What better time than the present to buy investment property in the UK?

So, what locations should you be looking into?

 

Inner London

In 2020 and 2021, a large number of people left the capital in favour of the countryside. The global pandemic saw many lose their jobs but as things started to stabilise, we saw a shift towards work-from-home (WFH). Now, a significant number of people are coming back.

Data from estate agent Hamptons showed that rents in Inner London returned to growth for the first time since the start of the pandemic in November. They have risen 3.9% compared with the same month of 2021. If this trend remains, rents in Inner London are on track to reach pre-pandemic levels by the middle of 2022. 

According to data from estate agent Knight Frank Prime Central London is already seeing an increase in rents of 5.3% compared with 5.1% for rents in Outer London. A lot of people who moved west from London are now looking for a one or two-bedroom flat. 

 

Manchester

Manchester is easily a safe bet for landlords who want to invest in buy-to-let property in the North. It is also one of the top locations for real estate development in the recent past. A steady population and employment increase of 84% between 2002 and 2015 as well as an economic boom have made the city a top destination for young professionals.

With Millennial investors fuelling the property market, experts are predicting a property price growth of 28% by 2025. Given that the Global Liveability Survey results list Manchester as the best place to live in the UK, there is significant appeal in investing in the city. The incoming North Rail project and the ease of COVID-19 restriction will also likely contribute to an influx of tourists. This will only add to the city’s appeal and value in the upcoming months and years.

 

Birmingham

Birmingham remains a top choice for buy-to-let investment and 2022 is no exception. Known as the UK’s second city, this Midlands powerhouse bears all the markings of a top investment location – it has high tenant demand, good transport links, a vibrant nightlife and local food and art scene.

The 2022 Commonwealth Games are the cause for a series of extensive regeneration projects across the city. The Games will attract tourists and many visitors, contributing to the city’s growing population. The ongoing work for HS2 Curzon Street is another factor.

Projected increase in the population puts it at about 1.24 million by 2030.  An average rental yield of 6.56% and up to 24.5% price growth forecasted by 2026 make Birmingham one of the best places to buy investment property in the UK. Its unique developments, such as Lockside Wharf are prime property locations to invest in for the new year.

 

Newcastle

Newcastle is famous for being one of the most affordable locations in the UK. This entry point also makes it even more appealing to investors.

With the average property price around £177,000, this makes it more attainable for first-time buyers. At the same time, the increasing demand for property has bolstered rental yields across Newcastle. The 8th largest city in the UK is now pushing the average rental yield as high as 5.23%.

These attractive property prices and strong population are two key factors behind investor interest in investing in Newcastle. As the work from home (WFH) trend may be here to stay, people are searching for higher quality spaces with more outdoor options such as terraces and gardens. Places like Newcastle are thus turning into sought-after locations that epitomise the balanced lifestyle of work and leisure people are searching for.

 

Leeds

Leeds is Yorkshire’s economic powerhouse, catapulting it to one of the top 7 best places to buy investment property in the UK in 2022. It boasts the second-largest banking and finance sector in the country – a big part of Leeds’ appeal amongst young professionals and investors.

Recent data shows Leeds has an 800,000 strong population and growing. Close to 73% of Leeds residents are thought to be in rented property. In landlord terms, this translates to consistent, long-term tenant demand.

As the UK market continues to show signs of recovery, prices remain on an upward trajectory. This means UK locations like Leeds will emerge as buy-to-let hotspots in 2022. The wealth of employment opportunities will likely contribute to rising property prices and create a consistent demand for rental properties.

 

Reading

Reading is a centre for IT, telecoms, tech and digital businesses given its strategic location in the heart of the M4 Corridor. There are multiple global corporations based in and around the area and that provides many high-value jobs. The Reading economy is worth approximately £7,800 million annually.

With some of the best transport links in the country, Reading is within easy reach of Heathrow Airport. It also has frequent trains into London, making it a preferred location for young professionals. The average house price in Reading is lower at £300,007, providing a good entry point for investors. The average gross yields in Reading are up to 4% and the price growth was 5.33% over the past 5 years.

 

Liverpool

Liverpool offers a mix of open spaces, an active cultural events calendar, a bustling nightlife, high-quality food choices, iconic views, and green parks that make it a desirable place to live.

Liverpool was the fastest growing city at the end of 2018 and has since been modernising rapidly. It is particularly popular with students, opening a host of large-scale investments. The regeneration of cultural touch points makes it appealing to students, young professionals and families alike.

It is one of the most popular destinations in the UK and named the former European capital of culture. For investors who are keen to maximise long-term gains, Liverpool is one of the strongest rental investment hotspots in the UK property market.

 

Conclusion

As the UK property market continues to surpass all expectations post lockdown, there has never been a better time to invest in UK property. The record-breaking property prices and a strong rental market mean investors can start creating or continue building their portfolio with buy-to-let property.

Both seasoned and novice investors looking into buy-to-let property can benefit from the present opportunity in the market. If you focus on the location and analyze the potential of the area you can reap lucrative long-term gains. This is what this guide on the top 7 best places to buy investment property in the UK can help with.  Identify where to invest, what to look for and what makes a place worthy of being called the best place to invest in.

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