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Buy to Let Investment: New Property Hotspots for 2018

January 31, 2018

Since the Great Recession many investors have been purchasing buy to let properties in financial safety nets such as London, Manchester, Liverpool and Birmingham (thanks to the high-speed train link HS2).

However, could it be all change for 2018? Some investors already have their eye on secondary cities and smaller regional areas that have seen a boost in job roles and population, or are in various stages of regeneration. Benefitting from low cost entry points and weak competition from existing rental stock, could it be rewarding to stray from the usual suspects?

Buy to Let Investment in The North

The property market in the north remained strong throughout 2017 and this is set to remain as a trend throughout the coming year. The introduction of aparthotel schemes – serviced complexes with no fixed rental contracts – has seen rental yields increase and investors can benefit from very affordable property prices.

Manchester

Now dubbed by some as ‘the London of the North’, Manchester is the fastest growing city outside of London. With countless regeneration projects dotted throughout the city, including the impressive Salford Quays complex, Manchester is still a fruitful location for buy to let investors to approach.

With an average property price in Manchester of £158,800, potential investors could jump in quickly and benefit from affordable asking prices before they increase as the following is completed:

  • A major extension of the MetroLink tram system
  • Expansion of Manchester Airport
  • Development of the Northern Quarter
  • Development of what is being dubbed the Northern Powerhouse

With demand from tenants outweighing supply it is predicated that rental prices will increase throughout the year whilst house prices remain at a standstill; a lucrative deal for investors.

Liverpool

With the Northern Powerhouse concept also applying to Liverpool, the property market in the city remains buoyant and has already seen both domestic and international investment. Boasting the UK’s fastest growing economy, Liverpool is fast emerging from the shadow of neighbouring Manchester.

House prices in Liverpool are amongst the lowest in England, with the average around £117,700 and properties available in suburbs for as little as £40,000. Sefton Park and Allerton are two areas capturing the gaze of investors, as well as Anfield, which is undergoing a £260million regeneration project.

In the city centre itself, it is the Liverpool Waters scheme that is attracting attention from investors and developers currently. The plan is dedicated to transforming a 60-hectare brownfield site into five new neighbourhoods, costing around £5billion. With young professionals keen on long-term rentals and 60% of university graduates wishing to remain in the city there is a very clear market for buy to let investors to tap into.

New Northern Locations for Buy to Let Investors

With 2018 set to follow the trend of the previous year, with Manchester and Liverpool being a safe bet, there are emerging areas in the north that investors should keep a close eye on:

  • Leeds – located at the heart of the Northern Powerhouse where thousands of new homes are under construction to meet the supply-demand imbalance. Leeds train station is set to become a transport hub following a revamp to accommodate the planned HS2 and HS3 networks.
  • Birmingham – HS2 will transport passengers to London in 50 minutes once in place and Britain’s second largest city is desperate for new homes, spanning the city centre and suburbs.
  • Sheffield – large demand coming from a boost in the number of graduates and young professionals wanting to call the city home. Many of Sheffield’s suburban areas are undergoing major regeneration and property prices offer good value for money and buy to let investors are keen.
  • Hull – championed as the UK’s City of Culture for 2017, Hull has one of the highest proportions of young residents in the UK and they seek affordable rental opportunities. Property prices as low as £50,000 are attracting buy to let attention.
  • Nottingham – most investors head for Birmingham when it comes to buy to let opportunities in the Midlands. However, HS2 is planned to include the city of Nottingham and there is a high rental demand and not enough properties currently.
  • Bradford – although not a city (and often in the shadow of Leeds) Bradford is slowly and steadily introducing regeneration projects and has a wide array of property styles at very affordable prices. Considered a dark horse for buy to let investors in 2018.

The Buy to Let Market in London

Every year there seems to be a new gentrified area of London that is the place to invest in property. However, due to a weakening in market conditions and the wandering eye to northern pastures from buy to let investors, there are blossoming areas where the market is promising and relatively free of competition.

It seems North West London could prove fruitful for investors, with neighbours Cricklewood and Brent Cross both planned to receive major development over the next five years. A £4.5billion regeneration project incorporating both areas is planned to deliver:

  • 7,500 new homes
  • 27,000 new jobs for local people
  • 200 new retail stores, cinemas and hotels across 2 million square foot
  • A new Thameslink station
  • Transforming the town square into a leisure and entertainment hub
  • An enlarged and relocated bus station
  • Improved green spaces and parks

With the scheme given the green light for this year, the first selection of off-plan properties are set to go on sale in mid-2019; a promising opportunity for buy to let investors.

White City

When the BBC TV Centre was sold in 2012 and the Media Village vacated the following year, Hammersmith and Fulham Council saw an opportunity for growth. Over the past five years redevelopment in the area has led to a mix of residential, social and commercial spaces.

Following on from Westfield London’s £1.6billion development in 2008, the railway arches of Wood Lane station are being converted into retail spaces and there is set to be extensive residential housing and parkland surrounding White City Underground Station.

Once ignored because of the estates and factories entangled with train tracks and roads, expansion has certainly encouraged buy to let investors to take note of White City.

Tottenham

Haringey Council is determined to improve Tottenham and there are a number of development projects in place, but many are not set to be finished until 2025. However, funding has been used with immediate implementation to improve local parks and employment opportunities.

Much of the development takes place around Tottenham Hotspur’s new stadium, which will replace White Hart Lane. Known as the Northumberland Development Project, this will also incorporate 600 new homes and accompany amenities such as schools and supermarkets.

Despite these plans being beneficial to buy to let  investors it is the council’s regeneration of existing housing estates that has many considering Tottenham as a new place to invest.