Buy to let property investment hotspots

buy to let hotspot Ask any estate agent what’s the most important factor when choosing a property and you’ll get the same answer ‘location location location’. As a landlord, finding the right property is something of a tightrope walk where you’ll need to balance house prices against rental yields, and that means investing in the right postcode.

Find the right property in the right location and you’ll have much less trouble finding tenants, which means a steady cashflow and fewer rental voids. Pick the perfect property in the perfect location and you can expect a serious capital return on your investment.

Changes to tax legislation, increased regulation and the economic uncertainty of Brexit have taken the shine off buy-to-let and it’s never been harder for landlords to balance the books. However, there’s still some great investment opportunities, you’ve just got to know where to look.

With prohibitively high property prices in the south it’s hardly surprising that savvy investors are looking north. Investment in the Northern Powerhouse is beginning to bear fruit and large-scale infrastructure projects such as HS2 & HS3 and the Trans-Pennine tunnel are spurring economic growth.

Business is booming in the north and it’s changing the way that investors are looking at the property market. Landlords investing in the north have traditionally benefitted from low entry costs and high rental yields without any great expectations of capital growth, but that could be about to change.

A recent report by KPMG predicts the North West, the North East and Yorkshire will enjoy some of the highest property price rises over the next five years (only narrowly beaten by London and the South East). The forecast is backed-up by findings from a mortgage comparison site who have been tracking rental yields to pinpoint the most profitable postcodes and three northern cities stand out:

Liverpool Already a firm favourite with property investors (and frequently crowned the county’s Number One buy-to-let hotspot) Liverpool has a young population and plenty of investment potential. Long gone are the years of economic decline, and with money being poured into urban regeneration, it’s a city that’s set to shine. Liverpool’s L7 postcode (Kensington and Edge Hill) took the top-spot with a median property price of £116,259 and a rental yield of 12.63%.

Manchester The fastest growing city outside of London has £1billion earmarked for infrastructure investment. Property prices are beginning to pick-up and rental demand is strong with young professionals looking for city centre lets and a sizable student population. Manchester’s M6 postcode (Salford) performed well with a median property price of £150,550 and a rental yield of 8.25%.

Sheffield A city with a rich industrial past that’s enjoying a creative and economic renaissance. It’s also rated as one of the best places to study and boasts two universities and is home to 60,000 students. Sheffield’s S2 postcode (Arbourthorne and Highfield) impressed with a median property price of £104,376 and a rental yield of 8.07%.

Other places that featured prominently included postcodes in: Cleveland, Preston, Dudley, Nottingham, Bradford, Sunderland and Plymouth.

While it’s difficult to predict the next buy-to-let hotspots it’s worth noting that many of the current best performing locations have three things in common: they are in the north, they are enjoying urban regeneration and they have sizable student populations.

No matter where you choose to invest it’s essential to protect your most important asset and that means finding the right landlord insurance. Quoteline Direct have been helping landlords for nearly 50 years and we guarantee to beat your current renewal premium by at least 10% (with similar cover, based on the same details). To find out more visit our landlord insurance page or Tel: 0161 874 7747 to speak with a member of our team.


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