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UK Property Investment - Where are the best places to invest?

Most investors are aware of the obvious investment locations such as London and Manchester, but what other parts of the UK are likely to generate a healthy return on investment?

by Mark Burns

The UK has one of the most thriving property markets in all of Europe. However, rising property prices in the capital and the weakening of the pound have forced many investors to look outside of London. So where are the best places to invest in property in the UK?

One of the best regions in the country to invest is in the North West of England. Lower property prices, high rental costs and high demand are all in favour of the North West.

Manchester has been classed as the best location to invest in property because of high rental yields, although the rental sector in the city is rather large. Currently, 26.85% of the housing stock in Manchester is rented privately and that is a figure that is way above the national average of 18%.

Looking beyond Manchester

Close behind Manchester is Liverpool. Again, rental yields here are high and, with Liverpool undergoing regeneration, house prices are likely to increase. The L1 postcode is on the rise and although it is still affordable, house prices have risen by 41.2% over the last few years. Liverpool also has a considerable student population and this means that rental properties show strong occupancy rates. Lower property prices and high rental demand offers investors the opportunity to make solid returns.

Sheffield is expected to see strong growth in property prices in the coming years and rental yields are also expected to increase considerably. The city has a short supply of housing and so, with increased demand, rental prices will likely be pushed up. The city is also going to see increased investment as a result of it becoming the second Northern Powerhouse, with its economy turning from the traditional manufacturing industries to the tech industry. The city is growing in popularity for businesses and individuals looking to rent, meaning that it will offer excellent buy-to-let opportunities. There are properties available in the city for under £70,000 that return yields of as much as 11%.

Cardiff and Coventry are also high on the list of the best rental returns due to low property prices. Cardiff has grown as a city with businesses moving to the area following years of regeneration. This has led to an increase in demand for property that gives investors the chance to benefit from good returns.

In the South East of England, investors can experience high capital gains when they invest in property. London properties can generate a return of 8% while properties in Cambridge see an average return of almost 6%. Rental yields are not so good in this part of the country, especially when compared to the north because of the increase in house prices. This increase in property prices is great for capital gains but not so good for rental yield.

Where should investors invest?

The north will offer investors a safe place to invest because of the low property prices. For a lower risk investment, investors should look to invest in places such as Manchester, Liverpool and Sheffield, all of which are performing excellently when it comes to rental prices and demand for property.

*This post was published according to the "Contributed Article Terms and Conditions"

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