Ten Best Places To Invest In UK Property In 2021 | Property Insider (2024)
Whilst 2020 has been a challenging year, the property market – to date – has boomed, driven by changing priorities for homeowners (and renters) along with the stamp duty holiday introduced by the Government back in July. The proof is there in the pudding for all to see – every region in the country recorded a rise in house prices in Septemberaccording to RICS’ September UK Residential Market survey – hitting an 18-year high.
Whether the record-breaking prices and transaction levels will maintain momentum through to 2021 or not we have yet to see, however what is certain is, either way, the market will continue to move. For investors, the question will be, now more so than ever due to shifts in priorities changing the landscape of demand across the UK, where are the top cities and towns to invest in 2021?
Here, leading UK developer SevenCapital has compiled its top ten best places to invest in UK property after analysing trends and data from multiple key sources including JLL and Zoopla, taking account of top areas for both past and forecasted rental yields and capital growth.
1.Birmingham
Average Price: £202,162
Average Rental Yield: 5.4%
Price Growth in Five Years: 14.2%
Continuing a strong run over the last five years, Birmingham once again tops the list as the best place to invest in the UK. Average rents have risen by 30% over the last 10 years and are expected to rise by 15.9% over the next four – figures which SevenCapital can pay testament to through the success of its own developments in the city, including 105 Broad Street.
With a raft of key projects upcoming and in the pipeline – notably the Midlands Metro extension, HS2 and the 2022 Commonwealth Games, the only way is up for Birmingham’s appeal, which is already being boosted as one of the top places for relocating Londoners. Its population is expected to hit 1.24 million by 2030.
2.Manchester
Average Price: £242,311
Average Rental Yield: 5.37%
Price Growth in Five Years: 15.76%
A truly Northern powerhouse where property is concerned, Manchester’s appeal continues to build momentum as a top place to invest, with house prices set to grow a further 17.1% according to JLL.
A host of career opportunities in global businesses and employment growth of 84% between 2002 and 2015 mean the city is now the top destination for young professionals in the North West.
With the Great North Rail project expected to come into effect by 2022, allowing 40,000 more passengers to travel throughout key cities in the North, Manchester certainly shows no sign of slowing down.
Another popular North West hotspot for renters, Liverpool boasts some of the highest yielding postcodes in the country – L1, commonly known as the Baltic Triangle, is one of Liverpool’s trendiest places to live and has delivered 8.1% annually in the past, whilst L7 has been known to deliver annual rental yields of 10%.
Whilst price growth hasn’t been as high as Birmingham or Manchester, JLL predicts a rise of 13.1% over the next four years, no doubt set to be bolstered by the £5.5 billion Liverpool Waters scheme which will deliver new public spaces and create 17,000 jobs. As far as affordability goes, Liverpool is ideal for those looking for a lower price point.
4.Nottingham
Average Price: £214,435
Average Rental Yield: 4.66%
Price Growth in Five Years: 16.92%
More affordable than the likes of Manchester, albeit on a par price wise with Birmingham, Nottingham has taken huge strides in recent years and now represents a key investment area. As with Liverpool, this city offers small pockets that achieve high yields of around 9% including the city centre NG1 postcode and NG7, which is home to the University of Nottingham – although this has slowed since lockdown.
With two major universities near the city centre and the Queens Medical Centre – a ‘super hospital’ home to 6,000 medical staff, demand in Nottingham continues to strengthen.
5.Newcastle
Average Price: £198,307
Average Rental Yield: 6.5%
Price Growth in Five Years: 6.2%
As the 8th largest city in the UK, Newcastle leads the way for investment in the North East of England. One of the most affordable locations in this top ten, Newcastle offers a strong average rental yield of 6.5%, although capital growth isn’t as strong over the past five years as other areas on this list.
That said, Newcastle has one of the best graduate retention rates in the country and is recognised as one of the fastest growing regions for new start-up businesses, both of which will likely boost demand from young professionals, which will in turn increase rental prices and thus, yields.
Home to 800,000 people, 73% of households in Leeds are currently renting, making this an ideal spot for investors seeking long-term tenants and consistent returns.
Leeds’ economy is one of the fastest growing in the country, rivalling several European cities, which is having a huge impact on opportunities within the city – enticing nearly one in ten of those leaving London each year since 2018.
Whilst capital growth sits just under 10% over the past five years, JLL predicts an accelerated growth of 13.7% over the next five years, and 14.2% cumulative rental growth.
7.Edinburgh
Average Price: £333,691
Average Rental Yield: 4.19%
Price Growth in Five Years: 12.33%
Edinburgh is a permanent fixture in the residential investment league tables. Due to its huge popularity as a place to live and work, the Scottish capital has seen excellent price growth over the past decade, demonstrated by its slightly higher average price point than most of our top ten.
With its continually rising economy, JLL predicts a positive impact on property prices to the tune of 17.1% over the next five years – the highest growth rate of any UK city.
8.Bracknell
Average Price: £383,788
Average Rental Yield: 3.98%
Price Growth in Five Years: 11.02%
With London bearing the brunt of the impact from lockdown in 2020, with lowering demand from buyers and tenants alike, the emphasis has in turn heightened on areas outside the capital, with perhaps some surprises – Bracknell being one.
Home to a host of globally renowned tech businesses such as Dell, Microsoft and 3M, Bracknell is also in the midst of a large-scale £770 million regeneration which has already boosted its appeal significantly, with Knight Frank forecasting price growth to hit 17% over the next five years.
As for its track record, Bracknell’shouse prices have risen 249% over the last 20 years yet at less than an hour away from London, it’s still nearly half the price.
9.Sheffield
Average Price: £209,405
Average Rental Yield: 5%
Price Growth in Five Years: 11.41%
Sheffield has blossomed over recent years, thanks to circa £480 million being invested into developing its retail district and a wave of further improvements to amenities. As such, desirability in these central areas have increased, with rental yields reaching up to 7% in certain postcodes.
Crucially, Sheffield is also amongst the top markets emerging from lockdown, where according to Zoopla sales were 20% higher than at the start of the year.
10.Glasgow
Average Price: £194,545
Average Rental Yield: 5.2%
Price Growth in Five Years: 15.05%
Another key Scottish city that’s now regularly topping the investment charts for property is Glasgow. Offering a lower entry point than Edinburgh, what Glasgow has in favour is higher five-year capital growth to date and a slightly higher average rental yield, both of which look set to strengthen further over the next five years at 15.4% and 13.4% respectively.
Bristol ranks as the joint-top best place to purchase rental properties in England and Wales, alongside Leeds. Bristol recorded a 14.4% increase in average house prices and a 14.3% increase in average rent. We calculated the estimated rental yield of a property in Bristol at 3.9%, using average house prices and rents.
Bristol ranks as the joint-top best place to purchase rental properties in England and Wales, alongside Leeds. Bristol recorded a 14.4% increase in average house prices and a 14.3% increase in average rent. We calculated the estimated rental yield of a property in Bristol at 3.9%, using average house prices and rents.
Single let residential property has been long considered the best property investment strategy in the UK for two main reasons. Rental Income – Those property investing can earn monthly rent each month, which recently reached an all-time high of £1,199 PCM in the residential UK market.
Research by Simply Business has identified the buy-to-let areas that are most popular with new landlords. We looked at which areas had the most landlords who've owned property for less than a year and taken out landlord insurance in 2022. London came top, followed by Manchester, Birmingham, Liverpool, and Nottingham.
While reduced interest rates may mean demand for houses could increase, this will also make monthly mortgage payments more affordable, which could mean 2023 is the perfect year for you to buy a house instead of waiting until 2024.
The average price of homes coming to the market has risen by 1.8%, or £6,647, from April, which is above the average increase for May. At the beginning of the year, research from Finanze suggested residential house prices could fall by 11% in 2023.
There is no hard and fast rule as to what a good rental yield is, as your return will depend on the location of your property as well as your expenditures. As a very general rule to give you a rough idea of what to expect, a rental yield of 7% is considered a very good yield for a buy-to-let property.
Of course, one of the easiest ways of making money off of a property is by simply leasing it. Long-term rentals are especially great as you don't have to bother finding new tenants every once in a while. Furthermore, there won't be downtime during which you won't earn money.
In summary: buying requires a bigger upfront cost, but renting is more expensive in the long term. A good rule of thumb is that buying a property becomes better value after around 10 years, compared to renting an identical property. Whether it's cheaper to buy or rent depends on several factors.
UK government bonds, also known as “gilts,” are loans that investors make to the government. Due to being underwritten by the government, they are considered the safest forms of investment. When you invest your money in this asset class, the government pays you a fixed rate of interest until the bond matures.
Savings accounts and money market funds are arguably the safest types explored in this article. And subsequently, they provide the lowest levels of return. On the other hand, preferred shares and index funds are prone to more volatility, but offer superior levels of return.
Gold. Gold is considered a hedge against inflation; many consider gold as an 'alternative currency' particularly in countries where native tender loses value. ...
The safest places to keep your money are savings accounts or electronic money institutions (EMIs) that are regulated by the Financial Conduct Authority. Under the Financial Services Compensation Scheme (FSCS), your savings will be protected even if the bank goes bust.
Investing £50k in property. While investing in property might be one of the safest and most profitable ways to invest £50k wisely, it isn't entirely without risk. ...
We expect a moderate recession throughout 2023, with GDP falling by 0.9%. In 2024 the economy will recover, growing by 1.7%. The key economic challenge is inflation, which has been at double digits for most of the second half of 2022, and hitting levels not seen since the 1980s.
Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.
They expect home prices to improve in Q3 & Q4 this year, over in 2023 they expect the medium home will delince 5.6% compared to 2022, to $776,600 in 2023 ($822,300 in 2022). They had predicted a median 2023 price of $758,600 forecast last October.
Analysts at Nomura predict UK house prices will drop 15 per cent by mid-2024, estate agency Savills (SVS) and UK banking group Lloyds (LLOY) forecast prices will slump 10 per cent in 2023, while Knight Frank, another agency, is predicting a 10 per cent fall over 2023 and 2024.
“House prices are likely to fall by more and for longer in real terms given inflation is proving sticky.” Home values have fallen more than 10% from their nominal peak in August when inflation is taken into account, according to an analysis by Bloomberg Economics.
In January, Halifax predicted prices to fall 8 per cent throughout 2023, while Capital Economics has forecasted a 12 per cent drop. According to others, these falls could spill into next year. The Office for Budget Responsibility expects house prices to tumble until September 2024.
Like many rules of real estate investing, the 50 percent rule isn't always accurate, but it can be a helpful way to estimate expenses for rental property. To use it, an investor takes the property's gross rent and multiplies it by 50 percent, providing the estimated monthly operating expenses. That sounds easy, right?
2% Rule. The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.
The top spot in 2023 – SE28 in Greenwich (6.1%) – offers almost 1% more in yield compared with last year's winner – DA9 in Dartford. Thurrock, Camden and Barking all offer good opportunities too.
It has proved to be an excellent way to generate and accumulate wealth over the long term, either through personal investment property portfolios or as a component of one of the UK's many institutional portfolios and pension funds.
As already mentioned, you can't live in an investment property purchased with the help of a BTL mortgage. However, once the mortgage term ends and you've paid off outstanding debt, you can then move into the home as you already own it.
Commercial properties are considered one of the best types of real estate investments because of their potential for higher cash flow. If you decide to invest in a commercial property, you could enjoy these attractive benefits: Higher-income potential.
The government (together with its QUANGOs) is the biggest land owner by area, the Forestry Commission owning some 2,200,000 acres (890,000 ha), the MoD 1,101,851 acres (445,903 ha), the Crown Estate 678,420 acres (274,550 ha), DEFRA 116,309 acres (47,069 ha) and Homes England 19,349 acres (7,830 ha).
68% of White British households were homeowners. White British households had a higher rate of home ownership than most ethnic minority households. however, 74% of Indian households were homeowners, a higher rate than White British households.
Sectors that typically perform well during a recession
For example, consumer staples like food and water, as well as transport, and healthcare, all tend to outperform the various stock market indexes during a recession.
The average wage that was seen as a sum on which people could live comfortably is £16,300 more than the £33,000 median annual pay for full-time employees in the tax year ending in April 2022, according to Office for National Statistics (ONS) figures.
What is a good salary in the UK? Between £2,500 and £3,000 is considered to be an ideal monthly net income in the UK. That salary could support a comfortable life in a city, including a two-bedroom flat, entertainment and leisure.
per year puts you in the above of households in the UK. The top 10% of households have an average equivalised disposable income of £70,900 per year while the bottom 10% have an average of £10,600. More details about how these data have been equivalised are available.
Flats tend to be cheaper than houses in the same area, so if you're on a tight budget and there's a particular place you'd like to live, you'll probably find it easier to buy a flat than a house.
Average monthly rents outside London soared to a record high of £1,190 in the first quarter of this year, with tenants in the capital paying more than £2,500 for the first time, according to figures from the property website Rightmove.
Buying a house gives you ownership, privacy and home equity, but the expensive repairs, taxes, interest and insurance can really get you. Renting a home or apartment is lower maintenance and gives you more flexibility to move. But you may have to deal with rent increases, loud neighbors or a grumpy landlord.
It has proved to be an excellent way to generate and accumulate wealth over the long term, either through personal investment property portfolios or as a component of one of the UK's many institutional portfolios and pension funds.
At present, the average rental yield in the North is 7.4% whilst the average yield in the South is 5.2%, meaning that there is a 2.2% gap. For property investors looking to add to their portfolio in 2023, the North East and the Midlands could be areas to focus on for the highest rental yields.
Is 2023 a good year to invest in property? With the average UK house prices in a state of flux since last year many have been asking this question. Without making you wait for the answer, in short, in our opinion, yes!Though there are caveats, and these will be based on what your investment goals and requirements are.
What Is The 1% Rule In Real Estate? The 1% rule of real estate investing measures the price of the investment property against the gross income it will generate. For a potential investment to pass the 1% rule, its monthly rent must be equal to or no less than 1% of the purchase price.
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