We are all aiming to achieve financial freedom, which is why making informed investment choices is so important. Having a sound overview and healthy knowledge of the property market essentials will go a long way towards supporting the creation and maintenance of a strong investment property portfolio.
One of the property investment basics that we always cover with our clients is to research your location. While it sounds like a given, you’d be surprised just how often it gets overlooked.
The noise and pressure of the markets are louder than ever this year with tax changes pushing landlords to launch buy to let mortgages through limited companies.
All of this pressure often encourages investors to push ahead without doing the essential research.
The Great North Run
But if you’re keen on starting a new property investment portfolio or expanding your existing one, it pays off to think outside the box and consider a number of locations before choosing your investments.
Many investors are solely focused on London and surrounds, and there are plenty of opportunities if you know where to look and are willing to work with higher house prices and fierce competition.
However, we always like to encourage our investors to make savvy choices and take advantage of key market opportunities as and when they happen. That’s why we’re heading north with our 2018-19 investment recommendations…
Property Investment in the University Towns
When it comes to buy-to-let, it’s the high-profile university towns with thriving student populations that come out on top. Research by TotallyMoney ranks Liverpool as the highest performer, with average rental yields up to 11.79% (in the L7 postcode) and 11.59% (L6).
Both of these areas are located close to two of Liverpool’s universities, emphasising the frequently positive correlation between student areas and rental yields.
The town centre in Middlesbrough (postcode: TS1) and the home of Teesside University continues the trend with an average rental yield of 10.94%, while Edinburgh – home to one of the most lucrative universities in the world – takes fourth place with an average yield of 10.62% in their EH8 postcode.
With another northern city coming out on top, research from the Hometrack Cities Index shows that Manchester is the fastest growing city for property price growth with an annual home price increase of 7.9%.
The M14 postcode (neighbour of Manchester Metropolitan University) boasts average rental yields of 10.08% while average rental yields across the city have increased to 5.42% with a rental price growth of 3.71%.
The Market Towns
In our many years of guiding clients to make intelligent property investment decisions, our experience has shown that properties located in metropolitan areas generally transition to a greater investment long term.
This remains true for the property markets in 2018-19 but bigger doesn’t always mean better. While the larger cities such as Liverpool and Manchester have shown promise, the market towns are also coming out high in the investment rankings.
Research from lending firms places Colchester top in the best property investment locations for 2018, where investors can expect rental yields of 3.71%, capital gains of 9.98% and a transaction volume growth of 2.79%. Northampton comes in second, boasting rental yields of 4.12%, and Leicester third with 3.9%.
If you would prefer an investment based closer to London, we would recommend considering Luton or Brighton, both of which offer healthy rental yields along with good capital growth and consistent demand.
The London borough of Redbridge is also an interesting option, where property demand is high thanks to a growing population seeking a leafy green location with excellent transport links and easy access to London without the expensive prices or pollution of the city.
The Next Steps for Investors
It seems that our predictions at the start of 2018 that the Northern Powerhouse of Manchester, Liverpool, Leeds and Sheffield would provide some of the best returns in the UK housing market have come to fruition.
Leeds is certainly one to watch – this is a city undergoing extensive regeneration with the construction of new homes and a complete overhaul of the transport system to include high-speed trains. As buyer/renter demand already significantly outweighs supply before these developments have been fully realised, the only way that property value and rental prices can go is up.
Now all that’s left for you to do is take advantage of the opportunities…
Our team of professional property investors offer advice on all aspects of property investment and provide access to market-leading products with the aim to minimise risk and maximise returns. For further advice and support, please contact us directly on 0203 281 7433 or drop an email to firstname.lastname@example.org