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It won’t surprise many to learn that Brexit uncertainty is still affecting the UK property market in 2019. But in many ways, while we have updated our ‘Best Places In The UK To Invest in Property’ from 2018 to 2019, in order to refresh it with the latest information, some things have stayed the same. London is still a stagnant market as people are apprehensive about making higher financial commitments, even though property prices are falling, for example.
Meanwhile, the ‘Brexit effect’ is providing dividends in some areas such as the Midlands, where online retailers are stockpiling goods and building huge warehouses, so jobs are being created in areas with lots of development land.
These locations are becoming more attractive places to live accordingly. Also, with the value of the pound falling relative to other currencies, there could be more overseas buyers investing in the UK, keeping demand high and house prices likewise.
The Bank of England Governor Mark Carney has claimed that a ‘no deal Brexit’ could shave up to 35% off house prices, but while nobody knows how Brexit will end up, the property market ticks over in 2019 regardless, with steady and tentative movement.
We remain in a unique period in terms of property investment in the UK, because there are strong returns to be made from both the buy-to-let (BTL) and capital appreciation markets. The UK continues to offer a huge rental pool and also strong property growth in certain areas; with one undoubtedly having some influence over the other.
A first interest rate rise in ten years occurred in 2017 and a second occurred as predicted in 2018, resulting in a base rate of 0.75% currently, and with more than half of all UK mortgages on a fixed rate, most people remain unaffected.
The Government are still committed to schemes to build new houses and assist first time buyers, so there should be no dip in enthusiasm for those looking for the best places to invest in property in the UK. There are still plenty of investment opportunities out there, if you know where to look. So, let us help you.
It’s a long time since property prices in London were affordable to the average Joe and that is unlikely to change any time soon. So, people are increasingly looking to invest in areas with commuter links to the capital, plus a sense of forward momentum as a place to live, and so Slough continues to benefit from the London exodus.
● In 2018 over 4,600 businesses were located in the area, including corporate heavyweights such as Unilever, Honda, Ferrari and O2.
● Crossrail construction is about to make journey times to key London stations much more attractive to young professionals, with its project to deliver high frequency and high capacity rail journeys from Slough to London set to be completed and running in 2019.
● House prices are forecasted to rise by 35% in Slough by 2020.
● It was reported by Countrywide in 2017 that more homes in Slough (46%) are let to a tenant that has moved from London than anywhere else in the country, so rental yields are also very good.
● The planned Heathrow expansion means Slough should offer stable investment opportunities for many years to come.
A new town in Hertfordshire with good commuter links into London.
● Stevenage has experienced a huge rate of growth in recent years, with the average house price increasing 58.5% over the decade to June 2017.
● A direct rail link to King’s Cross and so offers quick and convenient transport links to London. It is also close to the A1 for road access.
A Midlands town with good job growth from a heavy investment in industrial and warehouse units, which will be made available in Quarter 4 2019.
● Homes in Northampton were selling in an average of 27 days, the quickest rate in the country in 2017.
● House prices in Northampton have risen by 5.3% in the year to October 2018, which is larger than the national average.
● The Midlands is becoming a major hub for big distribution networks, as the retail shift from high street to online continues. Northampton has a central location with lots of development space such as the 1.6 million square foot Panattoni Park scheme opening in 2019, creating many job opportunities.
A popular new town with lots of land ripe for development.
● Amazon opened a new warehouse in the town in 2018 which is expected to attract similar big names and further job opportunities.
● Like Northampton, houses in Milton Keynes sell very quickly, going under offer in just 29 days.
● Phillip Hammond’s plan to revitalise the high street also helps places like Milton Keynes, where a small-town centre is dominated by a shopping centre. Milton Keynes has the go ahead for an impressive new retail and leisure development.
● Milton Keynes is in the top ten for fastest-rising house prices, so it may be a good time to invest now and to reap the benefits when all the development is finished.
A strong city in the Government’s ‘Northern Powerhouse’ which has experienced steady growth and investment in recent years.
● Manchester has seen strong business investment in recent years alongside regeneration projects such as Salford Quays, Media City and the Northern Quarter. This all improves the economy, the standard of living and of course the property investment market.
● Like London, Manchester is also surrounded by many attractive ‘commuter belt’ conurbations such as Fallowfield, Salford and Chorlton, with house prices rising rapidly and rental yields much more lucrative than those available in London.
● Around 30% of housing in Manchester is now in the private rental sector with rental yields currently around 8%. So, Manchester is also an attraction to those looking in the BTL market.
A stable city for investment with a thriving student and young professionals’ population, lots of job opportunities, a strong economy and prosperous growth making it attractive to big names in business, industry, leisure and retail.
● Leeds is attracting big companies to relocate to the city, such as the digital sectors of the NHS and HMRC, plus Lloyds Banking Group, Zurich, Sky and in 2019, Channel 4.
● The population of Leeds is currently 780,000 but is predicted to grow to between 930,000 and one million by 2033, so confident are experts of continued long term growth.
● There are lots of developments happening in Leeds, such as the re-shaping of the city centre through the ‘South Bank’ project and the modernising of the rail station, while Leeds Bradford Airport is being expanded and HS2 is also on the horizon for Leeds.
● A strong student and graduate retention rate mean that the BTL market is good and rental yields are attractive in Leeds.
The historic and culturally rich capital of Scotland with a robust housing market set for a further boost.
● Built on tourism, city landmarks and administrative prominence, Edinburgh’s high street is set to be boosted by city centre regeneration in the form of the £850million Edinburgh St James project, which includes 850,000 square feet of retail and hotel space.
● Edinburgh ranked top in a study by Royal Mail into the best places to live and work in the UK, and also enjoys one of the fastest-growing economies in the UK.
● Property prices rose by 7.7% between 2017 and 2018 and this trend is expected to continue over the next three years.
● Edinburgh is a student and cultural epicentre, which leads to a strong rental market with good yields from older, traditional and therefore cheaper properties.
With house prices so strong in many areas of the UK and the demand for housing not being met by new developments, it is not surprising that interest in the rental market is very high as people struggle to get on the property ladder. As a result, the locations mentioned below have been earmarked as some of the best areas for property investment for those looking to tap into the buy-to-let market.
Glasgow has a very young demographic, with 28.5% of its population aged between 21 and 35. So as a natural consequence, Glasgow enjoys some of the best rental yields in the UK, with yields of 6-8% being common, as people struggle to get on the property ladder and seek solace in a thriving buy-to-let market.
Newcastle has suffered somewhat from a media perception of a distant northern outpost with little class, but it has quietly become a fast-paced city with charm, character and prosperity. With good transport links via the Metro it is an affordable option for young professionals and hence will appeal to those looking to increase their buy-to-let portfolio.
House prices are not rising as quickly in the North East so there are some bargains to be had, and the time is ripe to invest now. Newcastle is growing commercially, with British Airways, HP, Nestle and Siemens all settling in the area. And with good graduate retention rates from a strong student population, the buy-to-let market is thriving, making Newcastle one of the best places to invest in property if you intend to become a landlord.
Nottingham represents a good opportunity to make money from the buy-to-let market. Private Finance ranked it joint first (with Liverpool) as the best performing rental yield in the UK, offering returns of 6.2%, after mortgage costs are factored in.
Average house prices in Nottingham are cheap at around £86,000 and yet average rent is high at £550 per calendar month. Naturally, this presents a good average rental yield, with the NG1 postcode seeing yields of 11.99%, and the NG7 postcode posting yields of 8.89%, which are some of the best in the country.
Long term profit for private landlords is a fine balancing act between careful investment and choosing the right location. These three locations offer affordable properties, in an improving market and with strong rental demand, and hence they certainly carry less risk for those looking to invest.
Meanwhile, many of the big towns and cities highlighted above as good investment opportunities, apply equally to the buy-to-let market, particularly Slough and the big cities of Manchester, Leeds and Edinburgh.