PROPERTY INVESTMENT
HOTSPOTS 2018

The Property Hub has rounded up the best UK property hotspots for 2018, to determine where you should invest your money for the best capital growth and guaranteed demand.

We’d all love to be able to predict the future of the property market and know exactly which are the best locations in the UK to invest in property for 2018. In the mid-1990s, few residents of Lambeth would have guessed their tired Victorian villas would soon be among the best places to invest in property in the UK. Pre-Millennial dinner party discussions about where to invest in property probably didn’t even mention Hackney, yet prices in this borough have risen by over 750 per cent in the last twenty years.

Today, we’ve come to accept inflated house prices across London and the wider south-east. To bag a bargain and maximise rental yields, savvy investors are increasingly looking north. The first fruits of the Northern Powerhouse are finally being realised courtesy of infrastructure improvements and funding for elected mayors, while HS2 could magnify the appeal of cities from the Mersey to the Aire. A recent report by KPMG suggests Yorkshire, the North West and the North East will see some of the UK’s highest average house price growth during the next decade.

It seems clear that many of the UK’s best buy to let areas are located north of the Midlands, itself hosting some of the best places to invest in property in the UK in 2018. But which towns and cities should you consider? We’ve trawled through house price reports and spoken to local experts around the country, building an authoritative picture of towns and cities that combine affordable prices with healthy scope for capital appreciation. These are The Property Hub’s tips for the best places to invest in property in the UK…

Northern delights

Defining northern England has historically been challenging, but we’re treating it as anything north of Chester. This border city is itself something of a property hotspot, though its illustrious neighbours are performing even more strongly

1. Manchester

In a recent Property Hub podcast, we discussed how Manchester is becoming “the London of the North”. The fastest-growing city outside our capital hosts some of the UK’s largest regeneration projects, spearheaded by the media-powered Salford Quays complex and digital-oriented Northern Quarter. As the epicentre of a thriving metropolitan area, Manchester is clearly one of the best cities to invest in property in the UK. There are ten Greater Manchester districts in total, though we’re focusing on the city itself.

This is a good time for property investment in Manchester, with high ROIs in places like Fallowfield, Salford and Chorlton. Prices are rising rapidly, yet yields still average twice those on offer in London. Around 30 per cent of Manchester’s housing stock is in the private rented sector, with a six-figure student population underpinning demand for HMOs and flats. Manchester is renowned for red-brick terraces and semis, though belated attempts are being made to increase urban apartment volumes, as has already happened in Glasgow and Cardiff.

If you’d like to know more about the Manchester market, The Property Hub’s Manchester Property meetups are held on the first Thursday of every month, in Kaz Bar at Tiger Tiger. Please register in advance before attending.

2. Liverpool

Manchester might be setting the trend for growth among northern cities, but arch-rival Liverpool is also benefiting from large-scale job creation and inward investment. Liverpool has the UK’s fastest-growing economy, with flagship investment projects like the £5 billion Liverpool Waters scheme. This masterplan will transform a 60-hectare brownfield site into five new neighbourhoods. A huge student population is already being drawn to Liverpool’s four universities, with 60 per cent of graduates opting to remain here long-term.

Property investment in Liverpool revolves around a young and professional workforce keen on long-term rentals. Average house prices are among the lowest in England, though they are increasing and selling times remain short. Liverpool’s northern suburbs are excellent for assembling highyield portfolios at low cost, with impressive rail links into the city centre. Anfield and Bootle have some of the region’s lowest house prices; more affluent suburbs include Sefton Park and Allerton.

Liverpool Property meetups are held on the first Thursday of every month, on the first floor of The Pumphouse at Albert Dock. Please register your intention to attend in advance.

3. Leeds

Having largely completed the process of gentrification that’s still ongoing in Liverpool and Manchester, property investment in Leeds represents a compelling proposition. Sharing an international airport with neighbouring Bradford, and a key beneficiary of HS2, Leeds is a stylish modern city with an impressive housing stock. However, our recent Property Hub podcast discussed how Leeds, like other northern cities, is in considerable demand among Far East investors. That’s dramatically reducing new-build supply.

Nonetheless, Leeds offers good capital growth opportunities. Three major universities support a thriving student population, while affordable house prices and high rental demand ensure healthy yields for landlords. Capital appreciation is another advantage, with property prices in Leeds up by more than four per cent in the last year. From the student HMOs of Headingley to the café culture of Horsforth, Leeds has plenty of sought-after postcodes. LS1 and LS11 are ideal for city workers, while LS6 and LS8 achieve impressive average yields.

Leeds Property meetups are held on the first Thursday of every month, at Mr Foleys on The Headrow. Please let us know in advance if you’re planning to attend.

4. Birmingham

There’s debate about whether Birmingham remains Britain’s second city, but it’s certainly the second largest. The literal and spiritual heart of England, Birmingham’s metropolitan area is home to almost four and a half million people. Its £90 billion regional economy is set for significant expansion when HS2 slashes journey times from London to just 50 minutes. The Midland Metro tram line already links many suburbs into a city centre whose rebirth is clearly evident around New Street Station and Paradise Circus.

A chronic shortage of rental accommodation is driving up property prices, with particularly strong demand for homes along the A456 corridor. It includes desirable suburbs like Edgbaston and Halesowen, packed with sought-after two/three-bed terraces and semis. Ripple effects from the gentrified Jewellery Quarter are finally reaching the infamous suburb of Handsworth. Cash purchasers may also wish to consider Birmingham’s swathes of non-traditional homes in areas like Kings Norton, which can be difficult to mortgage.

Birmingham property investment meetups are held on the first Thursday of every month, in M Club (formerly known as Mechu) along Summer Row. Please confirm you’ll be attending with our team.

5. Sheffield

Popular with property investors from around the UK, demand is outweighing supply in this proud South Yorkshire city. Like Bradford, Sheffield could benefit from price rises in Leeds, as tenants and first time buyers become priced out of the market there. The S1 and S2 postcodes offer some of the UK’s highest rental yields, while the latter includes the Park Hill estate. Formerly one of Britain’s most notorious housing schemes, the latest phase of Park Hill’s redevelopment should see 200 flats completed by the end of 2019.

House prices in a number of Sheffield wards have trebled since 2001, though prices in the east end still hover around the £100,000 mark. Southwestern suburbs like Fulwood and Dore have seen particularly strong price growth, with bidding wars making it harder to bag a bargain as homes sell within 48 hours. Sheffield is the UK’s gazumping capital according to eMoov, which is less of a problem for investors buying on-street terraces in Page Hall for £50,000, or purchasing tatty three-bed ex-council houses for £75,000.

Sheffield Property meetups are held on a Thursday evening at the start of every month, in The Plaza’s Ink & Water venue along Fitzwilliam Street. Please register in advance before attending.

Now you know where to invest…but what do you do next?

What type of property should you buy? How do you find and manage tenants? What’s the best structure to minimise tax?

We’ve spent years building the ultimate property investment resource, to answer all these questions and more. Tell us where you are in your property journey, and we’ll direct you towards the best free courses, podcasts and tools to help you take your next steps.

GET STARTED NOW

6. Hull

As the UK’s 2017 City of Culture, Kingston upon Hull is an increasingly forward-facing city with significant investment in wind power and digital technology. Graduates and young professionals are flocking into this Humberside city, giving Hull one of the highest proportions of young residents anywhere in the UK. According to local landlords, student letting generates the best returns with yields of 10 to 15 per cent in postcodes like HU6. It’s possible to buy a mid-terraced east end house for £50,000, though a budget of £120,000 will secure a modern three-bed semi in a respectable suburb.

A report by HSBC last year suggested house price growth and steady rental demand will make Hull one of the best buy to let hotspots for 2018 and beyond. Investors from London and south-east England have already recognised the appeal for HMOs in postcodes like HU3 and HU5, with their close-knit Eastern European communities. The wealthy Georgian market town of Beverley has enduring appeal, and homes often arrive to market in need of refurbishment.

7. Newcastle 

If your knowledge of Newcastle upon Tyne doesn’t extend beyond the Angel of the North and the Metro Centre (both of which are actually in neighbouring Gateshead), you might be surprised by this proud industrial city’s charm and character. Newcastle forms the epicentre of a sprawling conurbation including Gateshead and Sunderland, plus North and South Shields. Connected by the iconic Metro line, each district has its own heritage and identity despite sharing many common attributes across their housing markets.

Analysis earlier in 2017 suggested the North East will be England’s most affordable housing region in coming decades. With prices rising by just 0.17 per cent in the last three months according to Zoopla, this isn’t the place to look for capital appreciation. Instead, it’s the place to build a long-term BTL portfolio. Suburbs like Benwell offer flats for less than £50,000, while the Quayside remains one of Newcastle’s trendiest addresses. Jesmond is home to many luxury homes, with suburban semis dominating Gosforth and High Heaton.

Newcastle Property meetups are held on the first Thursday of every month, in The Town Wall’s Billiards Room along Pink Lane. Please ensure you register in advance before you attend.

Middle ground

If the Northern Powerhouse isn’t for you, the Midlands engine room also appeals to investors, developers and landlords. If you’re wondering where to invest in property in 2018, three Midlands cities are worthy of consideration…

8. Nottingham

Nottingham has long been a prisoner of fortune. A legendary past has often obscured its vibrant present, while nearby Birmingham has traditionally provided stiff competition for investment. Yet this strategically-positioned city already has the UK’s seventh-largest metropolitan economy, and the proposed HS2 station would further enhance Nottingham’s accessibility. Current and forthcoming extensions to Nottingham’s tram network have already seen prices rise throughout suburbs like Beeston, Clifton and Wilford.

As with many cities, students are fleeing traditional HMOs in areas like Lenton for purpose-built blocks near the city’s two sprawling universities. West Bridgford and Bingham have seen prices rise as families compete for limited property stock. Meanwhile, landlords can enjoy low prices and high tenant demand in suburbs like Sherwood and Lenton. And if you’d like to know more about where to invest in Nottingham, the next edition of The Property Hub magazine will carry a special feature on the local investment market…

Nottingham property investment meetups are held on the first Thursday of every month, in The Lion at Basford on Mosley Street. Please confirm you’ll be attending with The Property Hub’s local meetup coordinator.

9. Leicester

With a marginally bigger population than Nottingham, and a considerably more successful football team, Leicester is the third and final Greater City of the Midlands according to EU body Eurostat. Its economy is larger than Nottingham’s, with numerous household-name brands based here. This ensures steady inward migration, while Leicester’s popularity among established residents saw house prices rise throughout 2017. Like other cities profiled above, an imbalance between supply and demand is also pushing up prices.

Average selling times in Leicester fell by 15 per cent in the year to November 2017, with terraced and semi-detached houses in great demand. The bay-windowed semis and modern detached villas of Wigston are perennially sought-after, alongside Clarendon Park’s traditional grid-pattern avenues. The best areas for buy to let include the LE3 postcode, where £70,000 buys an on-street terrace or a one-bedroom flat with yields over five per cent. LE1 is home to numerous sub-£100,000 flats with strong rental potential, many available off-plan.

Leicester property investment meetups are held on the first Thursday of every month at the Heathley Park pub just off Groby Road. Please confirm your attendance with our local meetup coordinator.

If you’d like to know more about the best areas to invest in property, each quarterly edition of The Property Hub magazine contains a detailed five-page guide to an investment hotspot. Recent editions have featured Norwich, Cardiff and Aberdeen, and the next edition will focus on Nottingham. Each article combines geographic summaries and previews of major investment projects with market commentary from local agents and investors. Accessing this treasure trove of information costs just £5 per quarter – go to The Property Hub Magazine page for information about how to subscribe.

10. Bradford

Five miles west of Leeds, and historically in its neighbour’s shadow, Bradford deserves consideration for its affordability and low-key regeneration. A large town rather than a city, Bradford features typically northern on-street terraced villas and bay-fronted Victorian homes. Look a little closer, however, and hidden gems emerge. Little Germany’s refurbished neoclassical buildings attract style-conscious young professionals, and villages outside the ring road combine Bronte charm with beguiling community spirit.

If you’re not fussy about location, it’s possible to buy a one-bedroom flat in Bradford for just £40,000. £60,000 will net you a decent back-to-back, while £70,000 will secure the lower end of the stone-built terrace market. These are ideal for landlords, with typical yields of eight per cent on two-bed homes in the affordable BD7 and BD8 postcodes. However, BD8 includes the Manningham district, which is best approached with caution. £65,000 is enough to buy a flat in the town centre, with trains from Forster Square station reaching Leeds in 25 minutes.

Now you know where to invest…but what do you do next?

What type of property should you buy? How do you find and manage tenants? What’s the best structure to minimise tax?

We’ve spent years building the ultimate property investment resource, to answer all these questions and more. Tell us where you are in your property journey, and we’ll direct you towards the best free courses, podcasts and tools to help you take your next steps.

GET STARTED NOW