2020 Vision – The Best & the Worst Areas for Investment in the UK

The property investment market is typically a ‘strong and stable’ one, but recent political uncertainty may have swayed investors into wondering where is best for business.

The eternal question of Brexit looms over, with seemingly no clear end in sight to the parliament stalemate, and this is one of the many factors that can have a lasting effect on the property market.

But which areas of the country shine through, and which reap little to no reward for investors looking to profit?

Here is a small selection of some of the UK’s best and worst areas to invest in currently.

1- Manchester

Northern capital and figurehead of the Northern Powerhouse initiative, Manchester is a solid choice for property investors looking forward.

A pivotal market to pay attention to in this city would be student accommodation, as it has the largest student population of any city in Europe, meaning the demand is rife.

white and red wooden house beside grey framed magnifying glass

Facts and Figures

  • Manchester has a city-wide population of around 550,000, and again the largest student population of any city in Europe.
  • House price growth in the North West region (encompassing Manchester) is due to increase by 16.5% by 2022, above the national average of 12.6%.
  • The average house price in Manchester currently sits at £198,331, according to Zoopla. This is a rise of 1.43% in the last 12 months, equating to almost £3,000.

2- Liverpool

Liverpool is a culturally rich city with more to its streets than its world-class football team (or teams, if you’re an Evertonian).

Aside from again the thriving student population, one of the most exciting areas in this city is The Baltic Triangle sector, a steadily growing hub of forward-thinking digital/tech companies that form a significant pillar in the cities’ economy.

Exciting upcoming developments in this area include an underground £3 million arcade investment below Cains Brewery, the state-of-the-art One Baltic Square development from RWinvest and a 340-room hotel that will overlook Queen’s Dock.

Facts and Figures

  • Liverpool mayor Joe Anderson valued Liverpool F. C’s Champions League victory at around £150 million in regeneration for the city.
  • Average rental growth in Liverpool has been projected to increase by 17.6% by 2022, above the UK average forecast of 12.6%.
  • The average house price in Liverpool currently sits at £176,571, according to Zoopla.

3- London

London’s cultural significance to the country and world at large is unmistakable, and the city is almost undoubtedly the most powerful in terms of tourism and influence.

Not only does the city make up 13% of the entire UK population, with over eight million people living there, but it also attracted close to 21 million visitors last year, clearly making it one of the most desirable locations in the world.

That might lead you to believe that the property market is, therefore, one of the highest in success rate and demand, but it is actually a zone you should probably avoid if wanting to make money from this type of asset class. London has the largest population of any city in the UK, but many are starting to leave and travel northwards as the job opportunity and standard of living in London falls.

Despite the negatives, though, there is a niche pocket of investors that are benefitting from the stagnating property market in London currently. Some have reported that international investors and those with mass amounts of capital can buy the extremely expensive houses as they dip in value, holding onto them with the intent of selling once their prices regulate in the future.

Facts and Figures

  • London, as a tourist destination, is set to attract around 30 million visitors each year, and the city’s population accounts for 13% of the entire country.
  • Average rental yield growth by 2022 in Central London sits at 3.0%, an increase but nowhere near other areas.
  • The average house price in London currently sits at £657,154 and is still rising. Property has been increased by 0.99%, which while not as quick as some other areas in the UK, is still way over £6,400.

4- Birmingham

The second-largest city and metropolitan area in the entirety of the UK, Birmingham is enjoying positive growth in the property market as of late, enjoying a 3.80% growth in capital appreciation in the last 12 months.

Additionally, 2.10% of that growth has come within the previous three months, which spells positives for investors looking for continual improvement into 2020 and beyond.

There are some negative aspects to investment in Birmingham, however, and so much like the UK property market as a whole, if you’re investing there, you need to make sure that you’re doing so in the right area. The B73 postcode, for example, has the sixth-worst performing rental yield average in the country according to TotallyMoney’s Buy to Let yield map, coming in at around 2.18%. 

Facts and Figures

  • Birmingham is regarded as the youngest city in Europe, and the demand for city property remains high. Rental yields in the area are currently around the 5% mark.
  • £778m of investment is being put into the city to prepare for the upcoming Commonwealth Games in 2022, which will be hosted in the area and is expected to bring in a significant economic boost through tourism and support of the local business. It’s Perry Bar area will receive 1,400 new homes as it is transformed into an athletes village over the next few years.
  • The average house price in Birmingham currently sits at £212,425, an increase of £2,914 in the last 12 months.

5- Cambridge

Despite a high asking price for property in the area, with the average house price standing at just under £460,000, Cambridge has some promising statistics that could make it quite the viable investment spot if you have the sufficient capital available.

Again, within the last three months, according to Hometrack, capital gains have increased by 2.00% in the area, which is brilliant considering that prices have only increased 0.30% overall in the last year.

Perhaps unsurprisingly, being known as prestigious university areas, Oxford and Cambridge have two of the youngest populations in the entire country, and this means that the potential for student property investment there is excellent.

Student accommodation as a property type is one of the most lucrative available currently. With many young people seeking out the likes of Oxford and Cambridge as two of the best schools around, aspiring to move and study there, the demand for this property type is also evident.

Facts and Figures

  • Estimates suggest that one in five people living in Cambridge are students. With a large percentage of these students choosing to live away at university rather than travelling from home, the opportunity for making consistent rental yields arises. 
  • Connections between Oxford and Cambridge are secure and getting stronger. In 2017 the government committed to a £7 billion investment project in the city, which will bring together the two towns through improved travel solutions and alike. 
  • Development and investment are constantly ongoing in the city and seems to show no signs of stopping as the university remains high-achieving. Just recently, plans have been unveiled for up to £250 million in commercial property in the area.