The best regions for UK investments this year

For savvy investors, the UK property market remains full of opportunity, offering diverse possibilities amidst global economic uncertainties. However, pinpointing the most lucrative locations requires careful consideration of many factors. From rental yields, regional economic dynamics and emerging trends, there are many aspects to weigh up when drafting a property investment strategy and the best places to invest in the UK.

While yields and appreciation potential are crucial, astute investors understand the importance of micro-market dynamics. Factors like local employment trends, infrastructure developments, and population growth significantly impact property values. Researching specific neighbourhoods and identifying unseen opportunities can lead to a strategy which can generate significant return for investors.

This article delves into the current UK property landscape, highlighting several promising destinations and trends for property investment in the UK. We have identified different cities and regions that cater to varying risk appetites and financial goals.

Yield-focused strategies

Northern cities

Northern cities like Liverpool, Leeds, and Manchester dominate the rental yield game, with figures exceeding the national average. Liverpool, boasting a 7.02% gross yield and vibrant regeneration projects, presents a compelling case. Leeds, with its burgeoning student population and projected rent hikes of 15%, is another attractive option.

Birmingham

Birmingham, the UK’s second-largest city, offers steady yields and affordable entry points. With a diversified economy and robust infrastructure investments, Birmingham’s property market stands to benefit from long-term stability.

Midlands

Cities like Derby and Nottingham offer surprisingly high yields alongside lower average property prices compared to their Southern counterparts. The average house price in Derby is £238,949, significantly lower than the national average of £364,895. These cities can be ideal for budget-conscious investors seeking capital preservation alongside respectable rental income. Derby also has excellent access to green spaces and leisure facilities. In fact, Derby has over twice the national average of gyms and health clubs per 100,000 people. Attributes such as these can have a notable impact on residential demand and property pricing in the area.

Capital appreciation prospects

London

Despite its premium price tag, London remains a magnet for investors drawn to its unparalleled liquidity and long-term capital appreciation potential. Areas like Battersea, undergoing extensive regeneration, present enticing opportunities for future value growth. For investors seeking ambitious projects with high potential returns, London offers numerous opportunities.

Cambridge

Cambridge’s prestigious university and thriving tech scene fuel a steady demand for housing, making it a haven for investors seeking capital growth, particularly in student accommodation segments. Cambridge also has the highest rate of job satisfaction in the country of 78.2% according to Glassdoor. Furthermore, 250,000 new homes have been earmarked to be built in Cambridge to attract new investors to the town.

Regeneration areas

Cities like Bristol and Newcastle, undergoing large-scale regeneration projects, present exciting possibilities. Bristol’s growing creative industries and Newcastle’s revitalised Quayside offer scope for significant value increases in the years to come.

Emerging trends

Build to rent

This institutional investment model offering professionally managed rental accommodation is gaining traction. Investors seeking exposure to this burgeoning sector can explore opportunities in key cities where demand for high-quality rentals outstrips supply.

PropTech

Technological advancements are transforming the property landscape. Online platforms offering fractional ownership and innovative data analytics tools empower investors with greater flexibility and informed decision-making.

Demand for suburban living

The pandemic-driven preference for more space and home offices is fuelling demand in suburbs rural areas, potentially impacting property values in these areas. Although the demand growth in these areas has slowed in recent months, there is still strong demand for properties in suburban and rural areas. The use of online delivery services has increased over time, and use of remote work arrangements has become commonplace. Therefore, living close to the workplace and local shops is less important to buyers and tenants. As a result, cheaper properties away from city centres have become more popular, presenting exciting investment opportunities.

Sustainability

Investors are increasingly placing a premium on sustainability, with a growing demand for energy-efficient properties and those built with solar panels. This is partly driven by government incentives and regulations, but also by a growing awareness of the environmental impact of construction. Efficient homes can also demand a premium when it comes to lettings, as reduced energy bills can increase the returns on a long-term investment.

Property funding experts

The UK property market offers a wealth of opportunities for investors across the risk spectrum. From high-yielding northern cities to London’s capital generation opportunities, understanding regional strengths, emerging trends, and investment goals is vital for success.

However you design your investment strategy, Alternative Bridging have the right team, funding and resources to help you. If you need a bridging loan to raise short-term finance for purchase, refinance, or property improvement, we have the right loan facilities for you. Or if you need a loan for site acquisitions, auction property purchases or funding work-in-progress, we offer a highly flexible overdraft product. Our term loan is perfect for securing funding for the purchase, refinance and improvement of your client’s property.

We’ve got you covered

No matter where your clients are in the UK, we have a committed team of property finance specialists at your fingertips. Our experts have the regional knowledge and industry experience to guide you through every step of your client’s property finance journey.

If you would like further information about the loan facilities we offer, please contact us using this form. Alternatively, you can discuss your property finance requirements with our experienced, friendly BDMs on 020 8349 5190.

Sources

Glassdoor

JLL

Joseph Mews

Knight Frank

Land Registry

Office for National Statistics

Zoopla