Investing in UK property in 2022 involves considering a number of factors. Even though some of these factors are obvious, we should get a clear picture of what makes a good Buy-to-Let investment before we proceed. A few key metrics that we consider are:
- Rental Yields
- Property Prices
- Population Regeneration
- Tenant Demand
- Career Opportunities
- BTL Opportunities
- Transport Links
- Tenant Demographics
In this way, we can obtain a comprehensive picture of a location’s Buy-to-Let performance, as well as identify emerging towns and cities that may not be traditional investment opportunities. Understanding these metrics is an excellent way for buyers to determine where they should invest in property in the United Kingdom.
Average Property Price: £214,696
Average Rental Yield: 6.56%
Price Growth in Five Years: 17.44%
In 2022, Birmingham is expected to remain one of the most attractive places to invest, continuing an upward trend that began in 2016. Affordability, strong yields, consistent demand from renters, and high predicted growth are the key reasons why more investors are exploring their options in Birmingham and why Birmingham remains one of the top locations in the UK to purchase an investment property.
Known as the nation’s second city, Birmingham has the largest economy outside of London. Birmingham’s total GVA in 2018 was £29 billion.
There are approximately 1.1 million people in the city itself, but there are a total of 5.57 million people living within the wider catchment area of the West Midlands, which has an economy worth £80 billion. It is anticipated that the city’s population will reach 1.3 million by 2039.
Young professionals have been attracted to Birmingham by its regeneration and employment opportunities during the last decade. With 40% of its population under the age of 25, this city is one of the youngest in Europe. With a young, working population, Birmingham provides buy-to-let property owners with a stable tenant market, which may explain why more investors are looking to Birmingham to invest in UK properties.
There are almost half a million people working in Birmingham, and it is known as the regional centre of business, retail, leisure, and culture in the West Midlands. Birmingham is also considered to be a highly investable city in the future. Birmingham’s growing number of businesses, jobs and high net-worth investment opportunities mean increasing demand for suitable housing from an influx of workers.
In Birmingham, young professionals are an attractive rental demographic for landlords, and economic prospects suggest that Birmingham real estate will continue to provide good yields and increasing values.
Some student areas in Birmingham, such as B4 near the city’s east side, can achieve yields of up to 11%.
An investment in a Birmingham property can result in strong gross total returns for investors due to its low property prices and robust yields. In the past four years, rents have grown by 28% and are projected to grow by 10% in the next four years, bringing much higher yields than would be possible for a property in the south.
As one of the UK’s most affordable places for first-time investors to invest in a property, Birmingham is a particularly attractive city for first-time investors.
For investors seeking to increase their return on investment, the City of London provides a number of opportunities to purchase luxury properties. In the coming years, there will be more and more luxury property developments in the capital, along with existing luxury properties such as period homes, listed buildings, and elegant, bespoke apartments.
Even with the boom in remote working, which has resulted in many people living and working in London moving out of the city to larger properties in other areas, the major London offices are back in operation, and employment in the city is higher than ever. Consequently, London’s property market is experiencing a resurgence.
As the home of several large companies, such as Standard Chartered and Lloyds Banking Group, the City of London provides employment to approximately four hundred thousand people.
In view of London’s popularity as a city for young professionals, the demand for rental properties is very high, which makes it a low-risk investment.
Since the prices of houses have risen in London and throughout the UK, many young professionals are looking to rent as they struggle to get on the property ladder themselves, creating many opportunities for landlords and investors. Rental investment properties in London include apartments as well as larger properties that are ideal for use as HMOs.
If you are looking for the best location to buy to let in London, there are a few hotspots with impressive rental yields.
Totally Money’s Buy to Let rental yield map provides valuable data when searching for the most profitable postcodes. Here are some of the top buy-to-let areas in London according to the map;
- E12 in East London including Manor Park, Little Ilford, Alderbrook, Newham and Redbridge have a 6.04% average yield.
- SE17 in South East London including Walworth and Newington has a 5.75% average yield.
- IG11 in Barking has a 5.59% average yield.
- Romford is home to several top-performing postcodes including RM9, RM8, RM6 and RM10.
- SE11 in South East London including Kennington and Vauxhall has a 5.12% average yield.
- SE28 including Southwark, Lewisham and Greenwich has a 5.00% average yield.
- N18 in North London including Upper Edmonton, Edmonton and Enfield have a 4.92% average yield.
Average Property Price: £208,792
Average Rental Yield: 6.53%
Price Growth in Five Years: 20.69%
Buying an investment property in Manchester can be a great option for anyone looking to make large returns from the vibrant Manchester rental market. Manchester boasts a strong property market that can offer investors the highest rental yields and the best capital growth prospects.
Rental demand in the UK is at record levels at the moment, and demand is even higher in this North West buy-to-let hotspot. This has resulted in some of Manchester’s most attractive rental yields. One of the most frequently asked questions regarding property investment in Manchester relates to rental yields. Keeping these in mind is a crucial piece of Manchester property investment advice. Manchester has several postcodes that generate some of the most attractive yields in the UK for property investments, such as the M14 postcode, which has an average yield of over 8%. Manchester’s property market is experiencing an increase in both rental costs and property prices. Property prices are 12.12% higher in 2021 than a year ago, while rents have increased by 6.8%.
As one of the best places to live in the United Kingdom, Manchester has experienced an increase in rental demand. According to a recent report by Urban Bubble, there are only 427 apartments available for rent in Manchester, the lowest number ever recorded.
Since the beginning of 2020, 9,200 homes have been constructed in the city, and most of these are fully rented. The city has a great need for high-quality rental accommodation, which makes buy-to-let Manchester investments even more attractive.
There is a high demand for rental properties in Manchester, partly due to the city’s thriving business community. Young professionals seeking to establish themselves in the city will find business opportunities in every sector, in both large and small companies.
Several industries in the city contribute over £4 billion annually, including manufacturing, business and finance, life science and healthcare, and digital and creative. The North of England and Manchester, in particular, have long been known for their exceptional connectivity, with transport links connecting cities, businesses, and people.
Average Property Price: £230,522
Average Rental Yield: 4.92%
Price Growth in Five Years: 19.26%
With 887,000 people of working age, Nottingham has one of the largest labour pools in the country. Taking into account the Greater Nottingham region, there are over one million people of working age in and around the city. Nottingham is well known for its educational institutions; more than 60,000 students attend university each year, and 54% of the population holds a university degree.
If you are a landlord looking to invest in a suitable buy-to-let market, Nottingham offers exactly what you are looking for. Many students stay in the area after graduation, providing a consistent and attractive market for buy-to-let landlords. Since many young professionals are seeking rented accommodations, landlords have a good supply of potential tenants.
Nottingham offers a strong range of options for travellers and businesses when it comes to travel and transportation, and further improvements are planned or underway. Located at a crossroads between east and west, north and south, Nottingham is an excellent destination for people who enjoy travelling or have ties to other parts of the country. Businesses and individuals benefit greatly from the proximity to the M1, the M42, and the A1.
In addition to focusing on work and travel, Nottingham’s leisure and entertainment offerings need to be enhanced in order to attract new residents or encourage them to settle there. Sport and live music are well known in Nottingham, but money has been invested in improving the shopping experience within the city centre.
Average Property Price: £215,355
Average Rental Yield: 5.23%
Price Growth in Five Years: 8.26%
An increasing number of the city’s residents are aged between 18 and 35 – a demographic that is often referred to as Generation Rent, making it an ideal location for buy-to-let investors. Over 42,000 students (UCAS) attend two world-class universities in Newcastle.
In addition, according to What Uni, 36% of graduates stay in the city after graduation for employment. There is a large international student population in Newcastle that contributes approximately £115 million to the local economy (primarily in Newcastle and the North East region). As a property investor in Newcastle, a younger population is extremely beneficial because they tend to rent a home, and with an influx of students arriving every year, there will never be a shortage of tenants.
In spite of the uncertainty caused by the pandemic, the June 2021 HomeLet Rental Index indicates that rents in the North East region have increased by an average of 4.2%.
There are numerous opportunities for buy-to-let property investors in Newcastle as a result of continued investment in the city’s infrastructure, universities, and business districts.
Currently, Newcastle is experiencing a significant increase in public and private investment, including the £350 million regeneration scheme for Newcastle Helix, the £200 million investment in the Stephenson Quarter, and the £250 million arena that is planned for Gateshead Quayside, among others. A total of £1.5 billion is expected to be invested in Newcastle.
A significant and long-term growth opportunity exists in Newcastle as a result of the influx of investment from the Northern Powerhouse scheme.
Average Property Price: £232,617
Average Rental Yield: 5.76%
Price Growth in Five Years: 15.30%
Having been named the best city to live and work in the North of England in 2021 and the best city for parks and playgrounds in 2020, Leeds property investment is one of the standout UK cities in 2022. In the last year, the Leeds property market has generated some of the best returns possible and has been rated as one of the hottest sales markets in the UK by Zoopla.As a result of its affordability, Leeds property investment has earned a reputation as one of the best areas to invest in real estate..
As of December 2021, the average house price in Leeds is valued at just £211,437, according to the latest Land Registry data. Comparatively, that is 27.67% cheaper than the UK average, including detached houses, semi-detached houses, terraced houses, and flats. Those who find buy-to-let property in Leeds will benefit from average gross rental yields of 8.97%, according to the latest Zoopla rental price data from December 2021. These statistics stack up incredibly favourably when you compare it to other cities in the UK.
It is estimated that Leeds has a population of 789,000, which is more than many other large cities, such as Manchester, Liverpool and Newcastle. In spite of having the largest population, Leeds has a compact location, making it easy to get around by foot and a popular business location. There is also a vibrant nightlife and shopping scene in the city.
Outside of London, Leeds is home to the largest number of universities. With 39,000 skilled graduates entering the city each year, Leeds has one of the highest proportions of young professionals in the country. Leeds has the largest legal and financial services sector outside of London as well as the largest city region economy.