With beautiful and culturally rich cities filled with some great tourist attractions and things to do, the UK continues to attract interest from around the world year after year. One factor in particular that attracts people to the UK is the property market, bringing excellent potential and opportunities for buy to let investors, provided you do all the right research. Here are some of the things that you should look out for when buying a UK buy to let property.
Strong demand
Wherever there is a high demand for property, the better the potential for a solid investment. The UK tenant demand has been rising over recent years, with data from mid-2018 revealing that the number of available rental homes is falling, whilst tenant demand had grown by 13% since the previous year. In certain UK cities like Liverpool, this tenant demand is outstripping supply with a rise of 19% year on year. Liverpool now boasts the fastest growing city centre population, with the city as a whole constantly evolving and welcoming new interest from young professionals, students, and those who are looking to buy or rent property in a more affordable area.
Demand for rental property has reached similar heights in Manchester, with the number of people living in the city centre having increased dramatically over the last fifteen years. In 2000 the number stood at around 10,000, rising to 50,000 by 2016 and predicted to rise as high as 80,000 by 2024. A large amount of this tenant demand is likely to come from young professionals who are leaving London and moving to Manchester to live and work. 2017 saw record numbers of London leavers making their mark on the city, and with brilliant business opportunities, rich historical and cultural offerings, and plenty to do, there’s no doubt this drive will continue.
High rental yields
Rental yields are a key factor to consider before making any buy to let property investment. If the area you’re interested in investing in doesn’t have high average rental yields, you’re limiting your potential to make a lucrative return on investment. In London, the average rental yield is 3.05% — significantly lower than Manchester’s 5.55% average. Manchester’s affordable property prices of £173,381 and rental price growth of 5.76% have been the reason behind these impressive yields, with investment opportunities from companies like RW Invest offering affordable Manchester properties with rental yields up to 8 or 9%.
Capital growth potential
Any time you buy property, whether it’s for buy to let or buy to live purposes, capital appreciation is a key factor that everyone desires. The more your property grows in value after you purchase it, the better the likelihood that you’ll resell for a higher price than when you first purchased. The north-west is an area with a lot of capital growth potential behind it, with regeneration projects in the region set to boost the economy in Liverpool and Manchester.
The UK as a whole is predicted to see a house price growth of almost 15% by 2023, with the north-west region presenting the strongest growth rates. While north-west locations like Manchester will see increases in value as high as 21.6%, London is set to stagnate in comparison. Some of Manchester’s biggest regeneration projects include St Johns, a new city centre neighbourhood that will supply the city with more accommodation, places to work and leisure attractions, whilst renovations will be made on Manchester’s key train stations, improving transport in and out of the city.
