Five hotspots for buy-to-let investors
Buy-to-let is an increasingly popular way to secure an additional source of income. It does, however, require careful planning to ensure you select the best properties. One of the most important decisions is location. Do you pick somewhere close to home, so it is easier for you to monitor the property? Or do you try to find the most profitable areas of the UK for you to make an investment? If you want the best investment opportunities, here are some of the places you should be looking.
Luton is a new addition to the list of top buy-to-let hotspots. Its status as a popular commuter city may explain why it has been seeing a 5.2% average increase in prices from year to year since 2010. This was some of the most impressive growth of any of the cities on this list, putting it solidly in the top ten. It may also be connected to pandemic-related shifts, as many people relocated from big cities such as London to smaller towns and suburbs during 2020.
Once the very top cities for buy-to-let investment, Manchester has admittedly seen a slight fall in its fortunes. In 2022 it dropped to fourth on the list, but that still puts it far ahead of most other locations. The average yearly growth in house prices is 4.2% and it has an impressive average rental yield of 5.9%. Its lower position is primarily a result of a reduction in private renters and an increase in vacant properties.
University cities are usually a good place for landlords. Around a third of Cambridge’s residents are renters in private accommodation and only about 0.7% of rental properties are empty at a time. That means that if you buy-to-let in Cambridge, it should be relatively easy to find tenants and your property is unlikely to remain empty for long. Average property prices increase by about 3.9% each year and 4.1% is the average yield on rental properties.
Oxford is so often the main rival to Cambridge, and its buy-to-let market is no different. Oxford has higher increases in its average property prices (5% a year since 2010), whilst its average rental yield is about 3.6%. Like Cambridge, it has a high student population and an incredibly low vacancy rate of 0.6% on properties available for rent. Private renters make up around 29% of residents. Firms such as Sam Conveyancing can assist if you need to carry out a building survey Oxford.
Top of the list of buy-to-let cities is Bristol. The Southwest’s most notable city is a hotspot in more ways than one, with a long cultural and scientific history. It has also seen rapidly increasing property prices, up 5.1% a year since 2010 and with no immediate signs of slowing down. In terms of numbers, that is an increase from £212,261 to £348,543 on average. Rental yields average around 4.6%.
There are no guarantees when it comes to investments. You can never be absolutely certain that one city will see its property prices continue to rise. Research suggests, however, that these five cities have seen some of the most reliable increases and have strong rental markets that could provide a source of income for the ambitious buy-to-let landlord.