When it comes to investing in the UK rental market, the possibilities are seemingly endless for investors. With more than 12 million people living in 5.5 million rented properties across the region, and more than a third of people now not owning their own home, it’s clear that there’s a real demand for the private rented sector.
But such strong demand brings with it a raft of choices for investors, chief among which is deciding where to invest their money geographically.
Different areas of the UK offer investors different things and different demographics, and there’s a lot to think about before you decide where to invest. For example, are you looking for more steady or larger, short-term investment? Who do you prefer to rent to? What sort of property do you want to buy?
These are few of the key questions you should be asking when you are considering where should you invest in UK property, and give some insight into the best investment city options for you. This list will also be useful when investing in property for beginners.
Where should you invest in UK property?
Are you looking for student properties?
When you are investing in the student property sector, it’s vital that you make your investments in cities that have high numbers of students and a relatively low supply of purpose-built homes to meet demand. High-quality properties being marketed to the right people can bring in returns of up to seven or eight per cent for buyers, so it pays to spend in areas where you know there are going to be enough people to make your investment worthwhile. If student property sounds like the option for you, then Manchester or Liverpool are among the very best places to buy, with around 100,000 and 57,000 students respectively calling them home.
Follow the link to see our latest high yielding opportunity, Aura Student Liverpool.
Do you want to invest in potential?
When considering where should you invest in UK property, potential is a big thing in property investment. It often means taking a risk on a city that’s still finding its feet in the wider market, and then waiting for the long-term payoff. The good news in UK property is that the risk is always relatively low, even when it comes to new cities. All you need is to find somewhere that is looking good in terms of new business creation and new building activity, and you have potential for real tenancy growth over a number of years. Why not look towards Liverpool if this is your preferred investment type? With legal and digital companies flocking to the city, and construction taking place across the south and west side of the city on a large scale, it really is looking good for the future, and offers investors the chance to be exciting early adopters.
Check out our list of the best places to invest in property UK 2017…
Are young skilled people your target market?
Young people are the cornerstone of growth at the moment in the property market, and they have been for some time, but you need to decide if these are the right tenants for you. Young people tend to want properties that are built with their own wants and needs in mind, so look at exciting new builds that have fast internet, gyms and other amenities included, as well as being close to work or education, is a good starting point as an investor. Some cities provide a great option to invest in these upwardly mobile youngsters, including Birmingham and Manchester, each of which has among the youngest average populations in the UK, with the latter one of the only to have seen a fall (33.9 years to 33.1 years) in the last six years.
Are you looking to market to commuters?
While many people are looking to live in northern cities thanks to their desire to balance work and life better, this isn’t always the way. Over the last few years, there has been an exodus of sorts away from London, where thousands of people have looked to move elsewhere. Many of these have gone to the north, of course, but others have simply enjoyed the divide between working in London and living elsewhere. This is a relatively new market, but one that investors can tap into with the right purchases. Towns and cities that have enjoyed investment in their regeneration, such as Luton, which has had over a billion pounds invested in recent years, offer a fantastic place to buy, and give investors the chance to get themselves in on a new demographic early, and for far cheaper than they might do in established commuter towns.
Cash buyers often have greater benefits in today’s current climate however, investors who require funding can use a buy to let mortgage calculator.
Are you invested in the long-term with your spend?
One of the big questions any modern investor needs to ask themselves when considering where should you invest in UK property, is how invested they are in the future. Over a decade ago, property flipping was one of the most popular ways to invest in the market, with buyers coming to market, buying a home and then quickly selling it on at a higher price when the sector improved sharply. However, this has become less common in the last few years as prices rise more slowly. Besides, that was always more of a practice for those based in London than anywhere else. Now, it’s all about long-term capital gains and slower growth in the market, as well as strong rental returns.
At the time of investing, investors should research what is a good rental yield in UK, as this can vary. If you have the patience, places like Luton, Liverpool and Manchester are ideal, giving you strong yields of upwards of six per cent and a steady income over a longer period of time.
Still considering where should you invest in UK property? Well-established property investment companies like Experience Invest provide individual investors with the best buy to let property for sale. Contact us to today for more information.