The latest research from SevenCapital, the property development and investment company, investigates the UK’s top-rated cities for buy-to-let investment in 2020.
While there is little doubt that the BTL sector has suffered something of a setback in recent years, there is still much demand for private rentals across the UK. As a result, the private rented sector (PRS) remains one of the most stable markets for investment globally, which is great news for tenants and landlords, as long as you choose the right location.
Birmingham
Topping SevenCapital‘s list for 2020 as one of the most desirable locations for overall investment in the UK, the city attracted the largest amount of direct foreign investment outside London and the South East last year. And with £billions invested in current and up-and-coming projects, it’s showing no signs of slowing down any time soon.
The city’s growth has overtaken all UK cities outside the capital in recent years, and with 1.2 million residents, still suffers a chronic undersupply of housing. Consequently, property prices since 2014 have increased by 19.3%, with Knight Frank predicting a further 12.5% increase by 2022.
The future looks promising for investors, with rental yields for 2019 ranging from 4.4% to 5.3%, according to PropertyData.
Manchester
The city continues to maintain its reputation as one of the most exciting locations in the UK in which to live and work, attracting families as well as young professionals competing for top jobs.
The city has already benefited from a tranche of investment that has transformed its skyline and looks set to reap the benefits of a ‘ripple’ effect, similar to that in London over the last decade. Property price growth since 2014 stands at 22.1%, while rental yields have remained bullish, reaching an average of 7.3% in the Fallowfield area of the city.
Liverpool
One of the top-performing BTL hotspots for rental yields in the UK. The postcodes L7 and L1 regularly achieve yields of 8-8.2%, with increases of 12-15% in the last five years, according to PropertyData.
Although price growth has slowed somewhat during 2019 after an exceptional Q4 in 2018, the birthplace of John, Paul, George and Ringo is still a top investment location in the North by virtue of eye-catching developments, fantastic career opportunities and rising tenant demand across the region.
Market professionals expect property prices in central Liverpool to rise by 2% and rents by 3.5% during the course of 2020.
Sheffield
The city could turn out to be a very attractive location for the first-time investor, as house prices are still lower there than in most UK cities. Nevertheless, house prices have risen by 19.5% since 2014 and by an impressive 223% over the last 20 years.
Despite this, the greatest attraction is the rental yields, currently 7.3% on average. The £480 million revamp of the city’s shopping district has hugely improved the city’s amenities and Sheffield’s popularity can only increase among visitors and tenants seeking rental property.
Leeds
The population of Leeds is rising rapidly, increasing seven times faster than London’s, and resulting in a severe shortage of homes. As a central location in the Northern Powerhouse, the city has presided over property price growth of 17% since 2014 and 211% since 2000.
Rental yields there have almost topped the charts of cities in the UK, reaching an average of 7.6%, according to PropertyData. The city is all set to become the next go-to location in the North, following around £7 billion of proposed development which will see the city centre grow to twice its present size.
