Best Places To Invest In The UK Property Market

Are you keen to invest in residential property in the UK? Ideally, you’re a UK resident and have your family home. Investing in property is a great way to build wealth when buying and holding property. This is a long-term strategy where the properties increase in value over the years you own them.

Property investing is not risk-free, so it’s recommended to have investment goals and study the property market in your country. If you’re in the UK, you’ll need to know what’s happening economically and politically there. Events like Brexit and the Ukraine War cause fluctuations in business confidence.

Homeowners and prospective home buyers need to know their income stream is safe. The stability of their income and prospects determines whether it’s a buyer’s or a seller’s market.

Property investors need to know a lot of information about the market, their financial position, and how they can fund property purchases.

Property Investing Is A Business

Additionally, property investment needs to be operated as a business, i.e., it needs to be profitable.  The revenue from renting properties must exceed all outgoings.

The investor needs to know the revenue (weekly rent) and outgoings (mortgage interest, specific landlord insurance, maintenance, and so on) before signing the sale and purchase agreement. Hence, they know if the acquisition is a worthwhile asset that will return a profit.

The list of must-knows for a landlord goes on, including an in-depth analysis of areas of interest to invest in.  Why? Buying a property is an oversized ticket item, and to make the numbers work, i.e., for the property to return a profit, it will need to be tenanted for no less than 48 weeks of the year.

Rental properties must be in sought-after locations, near transport, infrastructure, shops, entertainment, and schools to appeal to a broader target audience. Therefore, vacancy is much lower, and rental returns are higher.

Where are the highest yielding areas for property investors?

It’s hard to look past the North East for high yield. Cities including Sunderland, and Durham and also Dundee and Glasgow in Scotland.

Consequently, we’ve found some preferred areas to invest in the UK property market. One will surprise you as it is London.

London

When you think of London real estate, you immediately think – expensive! Well, not everywhere, and there are many types of property to choose from, with some like units and apartments more affordable in some locations. East London has been up and coming for a few years with new developments, trendy eateries, and entertainment. Hendon and Wembley have also seen an uptick in development, drawing many first-home buyers to its new apartments.

If you’ve got access to large amounts of funding, you may look at premium locations like Richmond. Its property has gone up 65% in the last ten years. However, remember, investing in property is a numbers game. Buy below market value, renovate to achieve the highest rental yield, and sell at the top of the market – i.e., when it’s a seller’s market.

While the yield is lower than other areas at around 4.92%, London is attractive for other reasons, so it’s always a great location for investment properties – if you can afford to purchase them!

Liverpool

Liverpool hasn’t always had the best reputation. However, in recent years, a lot of investment in infrastructure and development has been seen, including upgrades of notable buildings, boosting the city’s prospects. Anyone living here is guaranteed a good quality of life, which means it’s a highly viable area to invest in the UK property market.

There’s also the case that property prices haven’t completely recovered from the heavy hits 2008. Consequently, you can likely find a more affordable range of larger homes here for your investments, so Liverpool is an area to explore.

Manchester

Manchester is rife with tenant demand, so if you’re particularly keen to become a landlord or landlady, look no further than Manchester! The city is full of things to do and a stimulating urban environment for the young and old alike. There’s theatre, restaurants, parks, sports arenas, and gyms; it’s all here!

There’s also great potential for transport, with links to just about everywhere in the UK. Manchester has a buzz stemming from a vibrant social scene, an electric culture, and a booming job market; it is perfect for all your smaller housing investments so the young can pile in! Moreover, some would argue it’s far more affordable than London but offers much of the same magic.

Birmingham

They don’t call it the UK’s second city for nothing. After all, house prices were rising fastest in the West Midlands as recently as last August, so this a fast-moving train to leap aboard. Like Manchester, there is a great deal to do here, and because it’s in the Midlands, train journeys in any direction are short and sweet.

There’s also a population growing steadily, which means many more people will be looking for somewhere to call home in the next couple of decades!

However, you can get ahead of the curve and invest in Birmingham property well ahead of time. That way, you can ready yourself for the influx of new eventual tenants and more!

Conclusion

Property investors who invest in rental properties for the long term make a profit. However, like any investment, it’s not risk-free. Knowledge and experience of the best locations to invest in, a good grasp of what’s going on in the economy and other factors like political stability, all play a role in the success of property investment.

The best places to invest in the property market in the UK tend to be the most active and stimulating cities. This is where clusters of young people gather, looking to rent at affordable rates. London will always attract young adults,, and Bristol and Leeds’s university towns are safe locations too for the savvy investor.