While 2020 was a tumultuous time for many forms of investment, property had an incredibly strong showing, particularly in the UK.
While stocks and shares proved to be incredibly volatile, property held it’s own as demand for rental property increased by 20% (Zoopla) and average UK rent increased to £757, an increase of £18 compared to 2019.
This stability, coupled with attractive incentives such as the reduction in stamp duty, has made property one of the most attractive propositions for investors of all backgrounds.
Adding UK property to your portfolio is an exciting proposition to many seasoned investors right now, due to the reasonable prices, great capital appreciation and steadily increasing rental yields and with companies such as ourselves, offering block management services, this can even be considered a hands off investment, giving investors a reliable, low maintenance residual income.
With all the excitement over the UK’s property boom, we have compiled a short list of 3 areas which are perfect for investment in 2021.
While often overlooked when compared to other northern cities, York has become a sleeper hit with investors.
Driven by ever increasing demand, developers have began to create stunning new builds within the centre of the city, offering tenants the most modern of living in the most historic of cities.
In 2020, average rent increased from £524 in Q4 2019 to £542 in Q1 2020, just over the national average increase in rent and this trend doesn’t seem to be slowing as demand for property within the city increased by 25%.
Savills predicts house prices in the area will rise by 28.2% in just five years, offering investors a great rate of capital appreciation. This coupled with ever growing rental yields makes York a great area to invest in in the forthcoming year.
It’s not just lettings that have seen an increase though, York is now the UK’s 2nd most popular destination with tourists, welcoming over 7,000,000 tourists a year, making this a great proposition for those with an interest in short term or holiday lettings.
To learn more about your opportunities in York, click here.
Becoming a fully fledged city in 2002, Preston has finally found it’s feet as an investor hotspot.
Preston was voted the most improved city in the UK in 2018, a testament to how exciting the area has become for developers.
Investors have been drawn to the city due to it’s lower than average property price. The city averages around £115,000 for a property sale, well below the UK average of £218,000 and this, coupled with a robust demand for rentals, makes it one of the most attractive propositions in the UK today.
Preston’s student population is also on the rise which means developers have been able to successfully launch many student centric builds, further diversifying the options for savvy investors.
Preston is a city on the rise and with further regeneration planned for the area, it looks to continue growing in demand with investors.
To see more information on Preston, click here.
Birmingham has always proved popular with investors and in 2020, became the city with the fastest rising house prices, meaning investors capital appreciation was the best in the country.
While London saw a drop in average house prices drop by 2.5%, Birmingham saw a steady increase of 4.5%, far above the UK average increase of 3.5%.
Demand for high quality housing has been on the up in the city for a long time but 2020 saw increased demand, fuelled by the HS2 developments, city rejuvenation projects and the booming local economy.
Birmingham has often been viewed as the dream location for business due to it’s central location, affordability and ease of access, this continued on in 2020 with companies such as Deutsche Bank and HSBC setting up operations there, further boosting both the local economy and demand for housing.
Rental yields also continued on a steady ascent, with the average rental yield sitting at around 5%, bucking the trend that the Midlands and London have suffered lowering yields in recent years.
To discover more about Birmingham, click here.
The UK property market is at an exciting point for investors right now, with areas such as Preston, Birmingham and York proving that no matter where you look in the UK, there are some excellent options for investors.
The three areas we've looked at here are a good representation of the marketplace as a whole, offering investors great rates on return, reasonable entry prices and strong levels of capital appreciation.
The trend for growth shows no signs of stopping at the moment and with attractive incentives such as the break in stamp duty and help to buy schemes, there's never been a better time to invest your money in property.
The views, thoughts and opinions expressed in this article belong solely to the author, Rich O'Brien, and are not necessarily those of Residential Estates, or other groups/companies to which Rich O'Brien is affiliated.
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