The UK property market continues to be a profitable and reliable option for any investor, whether this is your first venture into the world of buy to let or you are a professional portfolio landlord.
Perhaps the most important consideration for any investor is the question of location. Properly researching where to put your money can be the difference between a successful investment and one which fails.
To assist, we have looked at a whole range of factors and listed our two favourite UK property investment hotspots for 2020 below, as well as identified the market you should avoid at all costs.
Invest in Manchester property
Our first recommendation is Manchester. The city’s property market is that rare combination of well-known among investors, but still on an impressive upward trajectory. Affordable entry prices and a booming population complete the perfect picture for investors.
The forecast for Manchester’s property market in 2020 is extremely positive, with the rate of house price growth far above the national average and demand still shooting up. It is estimated that almost 50 developments will complete in the city over the course of 2020, but with an additional 5,000 people a year set to move into the city centre according to Manchester Council, that still won’t be anywhere near enough to satisfy demand.
In particular, we recommend the luxury city centre apartment market for any property investors looking at Manchester. The city has one of the UK’s fastest-growing economies and is particularly strong in the sectors most likely to attract young professional workers to the city. For example, Manchester has been named the tech capital of the UK following its tech sector seeing a 277% increase in investment over the course of 2019. Momentum such as this has put the city on the map, and house prices are being pushed up as a consequence.
For more information on makes Manchester a property hotspot for 2020, please click here >>
Invest in Birmingham property
Our second recommended UK property hotspot is Birmingham. The city is at the heart of the West Midlands, with the region being one of the country’s biggest economies and most in-demand locations for young professional renters.
Much like Manchester, Birmingham is enjoying the benefits of many huge developments which are revolutionising the city and putting it on a global stage. The city’s office market is a good signifier of how quickly the city is expanding, with more than 775,000 sqft being delivered in 2019. This represents an increase of approximately 50% over the previous year with an additional 1.1 million sqft still under construction.
Furthermore, several multi-billion-pound developments such as the Big City Plan are transforming the city centre, making it a perfect modern hub which is incredibly attractive to people and businesses alike. Companies like Deutsche Bank, KPMG, PricewaterhouseCoopers and DLA Piper have all chosen the city as their base for good reason – and they are bringing young professionals with them, which is a positive for any buy to let investor looking at the Birmingham luxury property market. It is no surprise that the latest JLL West Midlands Residential Report projects house price growth for Birmingham of more than 16% over the next three years.
For more information about why Birmingham is one of our 2020 property hotspots, please click here >>
Should I invest in London property?
London has historically been considered the UK’s premier buy to let investment market, but recent years have seen the capital lose that title. An unfortunate combination of rapidly increasing house prices and falling rental yields have taken London out of consideration as a long-term investment destination for most serious, long-term landlords.
The latest Rightmove Rental Tracker shows that rents only increased by 0.4% year-on-year in London over the course of Q1 2020. This is a quarter of the national average (2.4%) and less than 10% of the annual growth seen in the North West (4.6%) – an area built around the booming Manchester market. What’s more, this is the continuation of a long-term trend of rental yields falling in London.
Likewise, even London’s much-cited house price growth appears to be lagging far behind other more vibrant markets. The latest Cities House Price Index from Hometrack shows annual growth in the capital of just 0.9%. Not only is that far below the national average, it is approximately a third of the growth seen in Birmingham and quarter of that in Manchester over the same time period.
In the current climate, we cannot recommend investing in London property. The long-term trends are not as strong as they once were, and greater profitability – not to mention stability – can be found in regional property markets such as Manchester and Birmingham, as mentioned previously.
If you are interested in purchasing an off-plan property in the UK, get in touch with our team today who will be able to advise you on the best options. Click here for more information >>