Property Hotspots: identifying where to buy
While it is customary to look at the UK as a whole and to consider the national average house price, different regions have different house prices, and hotspots arise around the country.
While location is important within a town (being close to the airport or the train station, or schools and supermarket), certain towns and cities benefit from economic fundamentals which significantly influence long-term value.
There are various tools available for investors to determine the hottest property areas at any given time: LendInvest runs a very good tracking tool which enables buyers to see the recent shifts.
It’s important to remember that these lists are constantly changing and shifting, so they need to be looked at with a pinch of salt.
There are however, areas of significant and growing demand within the UK, and they tend to be in the north. Investors would be well advised to look at the industrial powerhouses of the north: Birmingham, Sheffield, Manchester, which we believe are on the receiving end of long-term economic growth, underpinned by a burgeoning demographic.
The UK’s exit from the European Union is a question commonly asked by would-be investors.
While the final relationship with the EU has not been finalised, it looks like net reduction in immigration from the EU is what the Government intends.
However, we believe that this will not fundamentally harm the property market, for a number of reasons.
Firstly, the lower value in the pound makes this an excellent time for foreign investors to snap up properties. This lower pound has created greater demand, in fact, for purchases by those outside the country.
Furthermore, while house prices have declined since the Brexit referendum, the area hardest hit has been London, with the north of England suffering less of a decline.
London and the regions
First time buyers of buy-to-let property often think of London as being the desired target. In fact, there is a certain social prestige in owning rental property in desirable postcodes.
This misconception about London is something that should be quickly dispelled. While the property market in London is robust and world famous, it is also very expensive to enter as an investor and the high prices do not always result in the highest rental yields – which is the amount of money that the property brings in as profit on a yearly basis.
By contrast, the UK’s property hotspots are increasingly located in the north of England and this is an area worthy of consideration by investors for both its high rental yield but also long-term economic prospects for growth.
If you’re keen to explore the UK property market, we can help you learn more.
- Join one of our free monthly webinars for in-depth advice from one of our property experts
- Download our eBook, an A-Z guide on building a secure retirement income with a property portfolio
- Subscribe to our investor insight newsletters to learn about upcoming property hotspots and tips