For a long time, property investment has been considered a more lucrative and promising venture than other types of investment. Investors are continuing to put their money into property, with the UK property market, in particular, attracting attention from around the globe. Despite uncertainty brought on by Brexit negotiations, the UK property market has remained strong, especially in cities with a good reputation for success.
Here are some of the reasons why UK property should be considered for your next investment move.
House price growth
While house price growth might be suffering in some parts of the UK such as London, other areas are continuing to thrive. The north-west has seen a steady growth in house prices and has presented the largest increase in property value compared to all other UK regions. Between July 2017 and 2018, house prices grew on average by 2.7 per cent in England, increased by 4.3 per cent in Wales, 4.8 per cent in Scotland and 4.4 per cent in Northern Ireland. In the north-west, house prices went up by 5.6 per cent, led by the region’s thriving key cities, Liverpool and Manchester.
Those that choose to invest in UK property in the north-west region should expect continued growth on the horizon. Predictions for the UK property market have revealed a five-year forecast with a 14.2 per cent average rise in UK property prices as a whole by 2022, and an 18.1 per cent growth expected for the north-west region. Big regeneration projects are taking place in the region’s key cities, including plans such as Liverpool Waters and St Johns in Manchester set to create new and vibrant city centre neighbourhoods.
As RW Invest explain in their article “Top 10 Tips for Getting Started in Property Investment”, house price growth is one of the primary reasons why so many people are investing in property. You can make some serious money out of the price rises, so long as you invest wisely.
High rental yields
Rental yields are an important element of a buy to let investment. Like most aspects of the property market, the type of rental yields you can expect in some places won’t be the same as what you’d get in others. Luckily, a number of UK postcodes and cities have a track record for generating attractive rental yields. Some of the top performing cities for rental yields are Liverpool, Manchester, Leeds and Nottingham. Liverpool has a number of high performing rental yields and an average of 5.05 per cent, while Manchester boasts an average of 5.55 per cent. Nottingham follows behind with average yields of 4.46 per cent, and there are average 4.29 per cent yields in Leeds. With each of these top-performing cities being home to a number of popular universities, it’s evident that a large student population is a big driving force behind these high yields.
One of the final factors that can contribute to the success of property investment is a high level of demand for rental properties. In the UK, there’s a noticeable gap between supply and demand, with tenant demand increasing while the number of properties available for rent is falling. This shortfall in rental properties has been predicted to cause a 15 per cent rise in rental costs by the middle of 2023. While this might be bad news for renters, it’s a promising figure for buy to let investors hoping to generate higher rental yields on their property. Again, the north-west has been hit by a high level of demand, with rental price growth of 2.65 per cent in Liverpool and 5.76 per cent in Manchester. There’s been a recent rise in the number of people moving away from London and choosing to live up North. Manchester, in particular, has seen an influx of London leavers. People are selling their existing property in the capital to relocate, or moving to Manchester in the hope’s of buying their first home — something that’s a lot more difficult in London.
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