Based on its strong performance in recent years, Nottingham certainly deserves to be considered as one of the UK’s most attractive destinations for buy-to-let property investment. In our downloadable guide, we explore some of the reasons for this, including:
Please download your FREE guide to property investment in Nottingham by completing the form below
Property investment in Nottingham has proven to be a rewarding business. The city has delivered some of the country’s best yields, together with some of the highest rates of capital appreciation. On both these key measures, Nottingham has been performing extremely well.
Of course, an impressive track record is no guarantee of future performance, but there are many good reasons to believe that Nottingham will continue to deliver excellent returns in the years ahead. Key points to consider include:
Nottingham is the largest urban area in the East Midlands.
Nottingham occupies a central position within England and is well served by the motorway and rail networks. The East Midlands Airport lies just 15 miles away and the city will eventually have its own HS2 station, greatly reducing journey times to other key UK destinations.
As a result of this excellent strategic position, Nottingham is home to a wealth of large employers.
Major private sector employers:
Major public sector employers:
Major education sector employers:
This strong and balanced mix of well-established public and private sector employers has given Nottingham a robust economic foundation. However, city planners are seeking to build on this in the shape of an ambitious economic strategy.
Securing inward investment is the remit of D2N2 – the Local Enterprise Partnership for Derby, Derbyshire, Nottingham and Nottinghamshire. It is responsible for supporting business growth in an area that has a population of over two million people, and an economic output of over £42.9 billion per annum.
D2N2’s previous economic plan, launched in 2013, achieved its aim of creating 55,000 new jobs within three years. Its new strategic plan, entitled Vision 2030, seeks to generate up to £9 billion in added value in the local economy. It so doing, it aims to raise the total value of the area’s economy to £70 billion per annum, and to create 39,000 new jobs by 2030. It also seeks to ensure that 90% of those jobs are created within the service sector and in various knowledge-based industries.
To do this, D2N2 and Nottingham City Council are both committing substantial resources to business support programmes, vocational skills development, new business incubators and the creation of new workspace for future-focused businesses. In this, they are supported by important business outreach and commercial research programmes run by Nottingham’s two universities.
Meanwhile, Nottingham’s physical infrastructure is being improved through a number of major construction projects. Nottingham City Council has reported that they have already generated around 1,000 new jobs, and more are certain to follow.
Some of the most important schemes include:
This is just a selection of the urban regeneration projects that are now in progress in Nottingham. Some will generate jobs almost immediately, while transport improvements and business support schemes will tend to have more of a slow-burn effect. Collectively, however, they should all have a positive impact on the economy and on market conditions for property investors.
The latest EY Regional Economic Forecast found that over the last year, the East Midlands economy had grown faster than any other UK region. GVA rose by 1.6% and employment rose by 3.4% – more than double the UK average.
What’s more, EY expects this impressive performance to continue. It predicts that Nottingham in particular will fare well, achieving year on year growth of 2.1% between now and 2023, which is some way ahead of the projected UK norm of 1.8%.
Some of Nottingham’s fastest-growing industries include:
This shift towards more forward-looking sectors is important. Nottingham is projecting steady growth in employment over the next decade but unlike many cities, it is not making job creation a central objective of its economic plan. Rather, it is committed to changing the pattern of local employment; moving more people into higher-skilled, better-paid roles.
This is significant for property investors because if more local people take up more professional, higher-paid jobs, so the average spending power of tenants improves. This helps to boost demand for higher quality rental accommodation, while a general improvement in living standards can also help to fuel an upward movement in average house prices.
Please download your FREE guide to property investment in Nottingham by completing the form below
Nottingham’s property market is boosted by the presence of two universities, which help to ensure steady seasonal demand for rentals. The University of Nottingham has a student body of approximately 32,000, while Nottingham Trent University has approximately 33,000. In addition, Nottingham is home to the Queen’s Medical Centre, one of the country’s largest teaching hospitals.
In addition to attracting these many thousands of potential student tenants, the education sector sustains huge numbers of local jobs. Nottingham University has published an economic impact analysis, which puts its impact across Nottingham at £677 million, and estimates that its work supports 14,000 jobs across the city.
The thousands of local jobs supported, directly and indirectly by the universities, have an important effect on the property market. They help to sustain local rental demand in their own rights, but the universities also attract thousands of short-stay visitors every year, in the shape of students’ parents and friends, contractors, business delegates, visiting academics and others.
According to Hometrack’s March 2020 UK Cities House Price Index, Nottingham achieved the UK’s highest rate of house price growth. Over the year, average values rose by 4.1%, which compares against the UK-wide mean of 2.1%.
Importantly, these price gains also coincide with strong rental yields. In March 2020, Property Investor Today published details of a report that placed Nottingham third overall in the UK, with average yields of 5.46%.
Interestingly, it is Nottingham’s central postcode that has generated the best returns. According to PropertyData, the central NG1 postcode produced a yield of 7% in the year to March, while some outlying postcodes were delivering yields of less than 3%. This illustrates the importance of choosing exactly the right locations.
At the time of writing (April 2020), industry commentators have been very conscious of the possible economic impacts of the coronavirus pandemic. There is no clear consensus as to how it might affect the UK buy-to-let market and market predictions have been scarce.
What is certainly true is that rental demand in Nottingham is very strong, yet average prices are very affordable, having stayed well below the UK average. Whatever happens to the UK economy, these characteristics will not quickly change, so property investors should still find themselves in a very strong position.
Over recent years, Nottingham has proved itself to be one of Britain’s best property investment destinations and, once the pandemic is past, a raft of major urban regeneration projects will only improve the city’s appeal.
“Residential Estates were really helpful in helping me to navigate the property investment market. They have a thorough understanding of the market and were very personable and professional.”
“Very helpful agents. Prepared to push the other parties involved to get things done. They must appreciate good customers and will go the extra mile. Rare nowadays.”
“As a newcomer to buying off plan, I needed a helping hand with my first investment. Residential Estates proved to be the ideal partner, leading me through my options, explaining every step and clarifying every question … I thoroughly recommended Residential Estates for your next investment project.”
We have been working in partnership with Michael H and his team at Residential Estates for over three years now and they are such a great company to do business with and I can’t recommend them enough!
Excellent communication skills and a can-do attitude to boot, always working with their clients’ interests at heart which can somewhat be a rare ethos to have in the Property Investment sector. Keep up the great work guys and I look forward to working with you on your next development!
We have recently completed a purchase of a BTL through Residential Estates. I found their team (Chris and Danielle) to be easily accessible, and willing to answer queries in detail. They pay great attention to details and not one of my questions left unanswered. They are also very responsive, and will get back to you when they say they do. Having received plenty of unsatisfactory communication from different agents over the year, I’ve a great appreciation for their hard work... to other prospective investors I would say Residential Estates is a viable option for property deals. Both Chris and Danielle are knowledgeable, helpful and professional. Absolutely no hard sell and we are encouraged to do our own search, and moving in our own pace. They seem to have a good network/relationships with their vendors, solicitors, and letting companies, which makes their offering is far better than others. We would gladly use their services again for the next purchase.
Haven't used Residential Estates to purchase a Buy-to-Let, SA or SBSA yet but they are very helpful in all my questions and their webinars have been invaluable. Because of the RE webinars I have been able to claim back £2,500 from overpaid Stamp Duty on a previously purchased Student B2L! Will continue to watch the webinars and hopefully purchase a property or two within the next few years.