When it comes to buy-to-let investment, the UK’s property hotspots have historically been centred around London. In the years since the start of the recession, Liverpool and Birmingham have crept into the upper echelons of popular property investment areas, but as we get further into 2018 things may change further.
Looking For Regional Areas
Buy-to-let investors are homing in on the Northern Powerhouse, including cities like Manchester and Liverpool. But they are also increasingly looking at smaller regional areas, thanks to the lower prices and excellent prospects stimulated by regeneration.
There is the growing issue of oversupply in some cities of the UK, as developers react to the demands from investor/buyers rather than the people who drive the market by renting units.
Demand Still Strong In The North
Despite the problem of oversupply, demand will stay high in the northern cities, despite the political uncertainty and shaky growth forecasts.
Dominant hotspots in the UK, including Manchester and Liverpool will continue to attract investors, but they will also be looking in the surrounding regional areas too. Choosing an area near Liverpool, for example, that benefits from low entry points, a wide range of development sites, weak competition and the likelihood of catch-up growth, is an attractive investment proposition.
These smaller areas are benefitting from the investment in the Northern Powerhouse, and for them to attract property investors, must exhibit the same growth in jobs, population and infrastructure projects.
The Northern Powerhouse
Chancellor Philip Hammond has been quoted as saying: “If the Northern Powerhouse were a country, it would be among the biggest economies in Europe.” And it’s the government’s investment in the Northern Powerhouse that is amping up the continued focus on northern cities and towns.
This year will also see the Great exhibition of the North, due to take place over the summer in Newcastle Upon Tyne and Gateshead. This has benefitted from the Northern Cultural Regeneration Fund providing £15 million for the creative, cultural and technology sectors.
Earlier in 2018, culture secretary Karen Bradley said: “This £15m fund is a fantastic chance for towns and cities to develop inspirational projects that could have a transformative local effect – particularly in communities that have seen less cultural or creative investment in the past.
“We want as many people as possible to benefit from the Great Exhibition of the North and this fund will boost the Northern Powerhouse and help build a lasting legacy across the whole region.”
Northern Towns On The Rise
As well as the big cities that are now well on the way to completing major regeneration projects, there are four areas in Yorkshire that will bloom in 2018. These are Bradford, Doncaster, Halifax and Wakefield.
Bradford has one of the fastest improving universities in the UK, which has contributed to the town having the youngest population in the UK. It also received almost £1 billion investment in its public spaces, historic sites and shops and has been named the first UNESCO City of Film.
Over in Doncaster, employment has been boosted thanks to the town becoming the UK’s logistical hub. All of this regeneration has increased demand for rental accommodation, with starting prices relatively lower than current property hotspots.
Interesting Year For Property Investors
While in some ways the landscape has shifted for buy-to-let property investors, with the number of low risk returns diminishing, its new incarnation is a potentially more rewarding.
For investors willing to do their research before making deals, 2018 could be an extremely positive year in terms of ROI.