Property Investment in Nottingham

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:

  • Nottingham’s economy
  • Inward investment in Nottingham
  • Major developments in Nottingham
  • Business growth
  • Nottingham’s principal growth sectors
  • Nottingham’s tourism market
  • Nottingham’s housing market
  • Buy-to-let investment in Nottingham
  • The student property market & PBSAs
  • Predictions for the buy-to-let market in Nottingham

Please download your FREE guide to property investment in Nottingham by completing the form below

Why Invest in Nottingham? A Summary

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:

  • The UK’s fastest-growing regional economy
  • A large and growing population
  • A pronounced shortfall in housing supply
  • Affordable property prices
  • Large-scale urban regeneration and inward investment
  • Scheduled to connect to the HS2 rail network
  • Many well-established major employers
  • Steady growth in high-value industries
  • A university student population of around 60,000
  • An ambitious economic development plan
  • Thousands of new jobs being created
  • 39,000 new jobs targeted by 2030

Nottingham – an Overview

Nottingham is the largest urban area in the East Midlands.

  • City population: 329,000 (ONS, 2017)
  • Population of wider functional area: 920,000 (ONS).

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:

  • Boots
  • Rolls Royce
  • Center Parcs
  • Experian

Major public sector employers:

  • Nottingham University Hospitals Trust
  • Nottingham City Council
  • Nottinghamshire County Council
  • Nottinghamshire Health Care Trust
  • Sherwood Forest Hospitals Trust
  • Nottinghamshire Police

Major education sector employers:

  • University of Nottingham
  • Nottingham Trent University
  • Nottingham College

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.

Inward Investment in Nottingham

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:

  • Broadmarsh area regeneration: a £250 million retail and leisure development. This includes the £89 million intu Broadmarsh Shopping Centre project, and the creation of a new bus station and car park. This £43 million project will improve accessibility to the city centre.
    This work is part of a wider £600 million plan to enhance a large part of the city centre.
  • Nottingham College's City Hub campus: a new £58 million educational building that will create “new facilities and resources for college students, and provide community facilities such as a new training restaurant, café and performing arts centre.”
  • HMRC offices, Unity Square: a £60 million, new-build regional centre that will employ around 4,000 HMRC staff upon completion in 2021.
  • Redevelopment of Nottingham Castle: the £31 million refurbishment and extension of this scheduled historic monument should see the Castle being re-opened in early 2021. It is expected to attract up to 350,000 visitors per annum, together with around £9 million of annual tourist spending.
  • Nottingham Forest FC Stadium: this £100 million redevelopment is designed to increase the club’s capacity to 38,000. It will entail improvements to three existing stands, and a new three-tier stand will also include a museum, hospitality facilities, restaurants and executive boxes.
  • Boots factory site redevelopment: outline planning permission has been granted for a £750 million scheme to build new offices, a hotel and student accommodation.

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.

Business Growth in Nottingham

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:

  • Advanced manufacturing
  • Digital and creative industries
  • Distribution and logistics
  • Financial and business services
  • Life sciences
  • Tourism

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 Universities

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.

Nottingham’s Housing Market

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.

Property Market Predictions for 2020

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.


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