Property Locations

Choosing your properties location is a hugely important decision when it comes to property investments. You should make sure that the location you select aligns with your investment goals. Failure to choose the right property location can be the difference between your success and failure.

Here are some of the critical considerations to think about when choosing your property location:

Management: If you want to manage the property yourself, choosing a property in a location close to your current home is a good idea. This will make the logistics that little bit easier, for example, if you need to maintain the property. Alternatively, if you want to choose a far away property from your home, you may wish to outsource your management to a letting’s agency.

Rent of sell: Some areas are associated with high rental prices, while their market value has a ceiling no matter how much you improve the property. Others, once renovated, can drastically increase in market value; in this case, it might be worth selling. So, when purchasing your property, research what rental and sale prices other properties in the area have already achieved. Consider if you would prefer to renovate and quickly sell or keep the property as a long-term investment, then choose your location accordingly.

Centrality: Does the area (usually a city) have space to expand? If a city does not have much room to expand, there is often high demand within the area, meaning they retain their value.

Future developments: Is the area up and coming? If so, this could be a great place to buy a property. As the area becomes developed with new restaurants, schools, and jobs, it will become more desirable to increase the average house price.

Schools: If you are purchasing a family home, it is good to check out what school is in the area. Families often move to desirable catchment areas, so if your school is in the right location, you may find you have parents fighting over your property!

Amenities: It is also a good idea to consider if there are local amenities nearby. Most renters want to get to their groceries quickly, so nearby shops are a must.

Crime: It is a good idea to check out the crime rate in the area your potential property is situated. Try to avoid high crime rate areas, particularly if you are buying a family home, as you may struggle to find demand in these areas.

Where’s Hot!

SevenCapital and JLL gives us the low down on the best property cities from June 2021. They emphasise the unexpected market opportunities that have risen out of stamp duty breaks and low interest rates. This has resulted in a 10.9% rise in house prices, the fastest rate in seven years.

Lets take a look at their top locations.

Birmingham

Average Price: £202,162

Average Rental Yield: 5.4%

Price Growth in Five Years: 14.2%

Not only is Birmingham affordable it is also growing size, predicted to become the fastest growing city in the next five years. Another factor to Birmingham’s investable property market is the number of up-and-coming projects that will boost its economy, such as, the Commonwealth Games and the HS2 link. All this has led onlookers to predict Birmingham property prices to increase by 19.5% in the next five years!

Manchester

Average Price: £242,311

Average Rental Yield: 5.37%

Price Growth in Five Years: 15.76%

Manchester is one of the UK strongest investment locations due to its growing population and economy, resulting in predictions of a 17.1% rise in prices by JLL. Manchester has been likened to London in terms of its global businesses, increasingly the cities employment and job opportunities making it the no.1 destination for young professionals.

Derby

Average Price: £235,141

Average Rental Yield: 4.80-5%

Price Growth in Five Years: 22.47%

Derby, situated in the middle of the country, has links to Birmingham, Leeds and York, and 17 major universities within one hour’s drive. 48% of Derby’s under 35's, nicknamed ‘Generation Rent’, have been massive contributors to the city’s rental yields.

Derby has begun its ‘Derby City Master Plan’ to regenerate the city increasing jobs by another 4000 on top of the 4,500 it has already created, stimulating prices to rise by 24% by 2025.

Nottingham

Average Price: £214,432

Average Rental Yield: 4.66%

Price Growth in Five Years: 16.92%

Nottingham has come a long way in recent years, its two major universities and creative quarter have driven many students to demand rental accommodation. Additionally, the Queens Medical Centre is one of the biggest teaching hospitals in the country, housing over 6,000 medics, further stimulating its property market.

Newcastle

Average Price: £198,307

Average Rental Yield: 6.50%

Price Growth in Five Years: 6.20%

Newcastle is an ideal location for those looking for an affordable investment option, particularly if you have the view to rent. However, Newcastle’s optimal rental yields are concentrated to the NE1 and NE2 postcodes, other areas have faced considerable difficulties regarding capital growth.

Newcastle boasts one of the fastest growing regions for start-up businesses and has one of the highest graduate retention rates in the country. The city also has a corporate headquarters, strong digital and educational sectors driving the career opportunities available whilst supporting entrepreneurship. All in all, these factors make Newcastle a highly desirable area for young professionals to live in rented accommodation.

Leeds

Average Price: £263,037

Average Rental Yield: 5.10%

Price Growth in Five Years: 9.40%

Leeds is another northern powerhouse, respected for its rental market in which 73% of 800,000 individuals live in rented accommodation. Capital growth has been somewhat modest in Leeds.However, JLL predicts a 13.7% increase over the next five years, with most of the growth seen after 2022. In the longer term, Leeds’s economy is predicted to grow strongly due to the Conservative government HS2 link.

Sheffield

Average Price: £209.405

Average Rental Yield: 5.00 %

Price Growth in Five Years: 11.41%

Sheffield property market is increasingly becoming an attractive investment opportunity due to the cities' £480 million development plans. Postcodes such as S1 have benefited from the increased amenities, allowing landlords to enjoy returns of around 7%. Post-lockdown, Sheffield has seen one of the highest rises in sales of approximately 20%, according to Zoopla.

Glasgow

Average Price: £194,545

Average Rental Yield: 5.20 %

Price Growth in Five Years: 15.05%

While Glasgow has often been second best to Edinburgh, predictions suggest the city will perform equal to Edinburgh in the next five years. Rental yields are set to rise by 13.4%, while sale prices could increase by 15.4%. The rise in rental yields can be attributed to 4000 purpose-built rental homes and family schemes aimed at doubling the city’s population by 2030.