Even for a seasoned investor, working out where to purchase buy-to-let can be a bit of a headache. The headlines are constantly contradicting one another on UK rental ‘hotspots’, swaying between the North/South divide, reporting on rent rises and dips, which locations are drawing young professionals and where government investment could see house prices rocket. Luton could be the flavour of the month in May, and Sheffield in June.
So where should you be looking to invest? We have outlined the top three buy-to-let locations in the UK that, according to recent data, look promising for property investment:
Constantly praised by experts as being a buy-to-let hotspot, Manchester is experiencing some of the fastest growth in the UK. Popular with young renters in particular, the city is experiencing a drought of high-quality rental accommodation in the city centre as it struggles to keep up with population growth. This has led to strong rent rises, capital appreciation and an influx of new developments springing up to cater for a new generation of professional city dwellers.
According to GoCompare, Manchester has the highest yields and rental growth in the UK at 5.55% and 5.76% respectively. Additionally, JLL forecasts average house price growth of 4.2% per year for the next five years. These figures are unsurprising when you consider that nearly half of all Manchester university graduates stay in the city for work.
Whilst a lot of figures stack up against the capital, it’s impossible to deny the city’s status as a hotbed for property investment. The same data from GoCompare that placed Manchester as the top buy-to-let location listed London in second place thanks to its huge population, the number of under 35’s who are likely to rent and the amount of properties available.
Although property prices are high and yields are comparatively low compared to emergent Northern cities, London boasts one of the busiest rental landscapes, with prime rental properties in high demand. As the UK’s capital city, London has long attracted property investors and most would agree that its future popularity with tenants is safeguarded.
Compared to Manchester and London, Liverpool is a somewhat underrated city for property investment. But with a huge student population of over 70,000, inward investment and growing house prices, the city is primed for investors to make money.
TotallyMoney’s Buy-to-Let Yield Map 2018 put two postcodes in the city (L7 and L6) as having average rental yields of over 11%, showing the extent of the opportunity available there. JLL also indicate strong forecasted house price growth of 3.6% per annum over the next five years.
Are you looking to invest in UK buy-to-let, or are you a landlord looking to rebalance your portfolio geographically?