2018 has already seen a big shake-up of the property market with London’s property prices dropping for the first time in almost 10 years.
As a property investor or home buyer, the news of falling house prices may have you asking: Is it still a good time to invest in UK property? Our answer is: Absolutely. The more important question you need to be asking is where should you invest in UK property?
What Makes a Good Property Investment?
For property investors looking to make a good return on investment, securing a high yielding property is key. A high yielding investment is normally born from a combination of low property prices, high rental demand and a booming and stable rental market.
However, securing these yields is not always a straightforward task. Fluctuations in the property market can have big impacts on predicted yields, so it’s vital investors undergo comprehensive research and have a thorough understanding of the current property market. Where you choose to invest in property can make the difference between high and average yields.
The London Property Market in 2018
In the past, London was the first stop for investors looking for high yield property. The city’s property market had gone from strength to strength over the last 20 years, seeing an influx of foreign investment in both residential and business districts all over the city. Combined with a constant flow of young international professionals, investors benefitted from sky high rental and property demand.
Things really took off for London when its redevelopment spread to former industrial areas in the south and east of the city. This continued to drive up prices and created even more opportunity for buyers and investors – who, if they bought at the right time, were lucky enough to benefit from amazing yields.
However, times are changing for London. House prices have fallen for the first time in almost a decade, with the first year-on-year drops since the height of the financial crisis eight years ago. Several of the city’s central areas have reported annual property price falls over the past year, with the trend also rippling through to the capital’s outer boroughs. Overall growth in the capital has slowed to 1%, a figure way below the 4.3% seen in February 2017. Statistics from the Office for National Statistics (ONS) show the average property in the capital is worth almost £5,000 less than a year ago.
Reasons for this seemingly sudden fall have been attributed by Hometrack to the following:
- tax changes discouraging overseas and domestic buy-to-let investors
- high house prices putting-off first-time buyers
- Brexit uncertainty
Either way, these recent developments have taken the shine off London’s property market.
Where’s the Best Place to Buy High Yielding Investment Property?
While London’s property market is finally slowing, the same isn’t true of the rest of the UK. In fact, various areas in the UK are currently in the middle, or on the edge, of an exciting property boom. This presents brand new opportunities for investors and home buyers.
By tapping into these up-and-coming areas as they begin their upward trajectory, property buyers may be able to cash in on the highest yield UK property – not dissimilar to those once seen in London. And for this, the UK’s North currently represents a great opportunity for property investors.
Finding the Highest Yield Properties in the UK
A clear trend in the UK’s property market is the growth of the Midlands and the North. Liverpool, Manchester, Leicester, Leeds and Sheffield are among the cities that have reported property price increases of 6 to 8% over the last year – some of the largest price jumps in the UK.
It’s for this reason that northern towns and cities are being dubbed ‘Britain’s powerhouse’. Many of these locations are now benefitting from huge government investment into local infrastructure. In turn, businesses have started to flock to these newly developed areas, creating new jobs and sparking population growth. This healthy injection of cash into unique, culturally-rich and characterful cities has spurred on the local economies and increased the demand for rented property.
However, there’s more on offer here than just rising rental demand due to re-development. Currently, property prices in many of the North’s cities and towns remain significantly lower than those in the south, providing that extra margin when it comes to generating high yields. This combined with assured rental guarantees makes the North and the Midlands a hotspot for buy-to-let investors. Even home owners can expect to make great profits due to anticipated growth in current property values.
High Rental Yield Opportunities in Leicester
Leicester is a perfect example of how property power has shifted away from London.
Having been rated as one of the UK’s highest profile and forward-looking cities, Leicester is fast becoming the Midland’s most sought after city. The multi-million-pound development and regeneration of the city has transformed it into a property hotspot with rental demand rising sharply as more people head to the city to study, work and start a family.
If you are a buy-to-let investor, Leicester presents a huge opportunity. The large student population from the city’s three growing universities presents an evergreen source of rental demand. When combined with the city’s ongoing redevelopment, Leicester is seen as an attractive place to build and develop business, attracting a growing number of young professionals.
All of these factors have contributed to Leicester’s property prices gradually rising, and the high rental yields created in the city have placed it at number five in the UK’s buy-to-let hotspots league.
As property development experts, Fitzwilliam Capital Partners has kept ahead of the curve in Leicester. Predicting the growth in the area, we’ve built three developments in the city since 2015, including: Agin Court, Crecy Court and Blenheim Court. Each have been designed to offer buy-to-let investors and home buyers alike the opportunity to invest in high-quality property just as the city is starting to see a sharp upturn in property values.
High Rental Yield Opportunities in Northern Commuter Cities
It’s not just Leicester that’s boasting exciting growth, Leeds, Liverpool and Manchester have also been on the rise for some time and are still growing. Many have already taken advantage of the property market growth in these core northern powerhouse cities.
However, it’s the northern commuter towns and cities such as Halifax, Pontefract and Doncaster that have recently been flagged as up and coming property hotspots. These smaller satellite towns boast great connections to the big cities as well as starting to grow their own thriving economies due to current or planned redevelopment.
In a recent article in the Express, Ray Withers, the chief executive officer of Property Frontiers, explained that: “Halifax is enjoying a “once-in-a-lifetime regeneration funding” and has plenty of young professionals working in the area.” He added that: “Doncaster is becoming the UK’s logistical hub, which has boosted employment there and demand for rental accommodation.”
With property developments already in Halifax, Doncaster, and Pontefract, Fitzwilliam Capital Partners has been able to help investors and home buyers cash in on these uncrowded yet booming areas – which are arguably some of the best places to invest in UK property
For the Highest Rental Yields, Stay One Step Ahead
In today’s property market, it’s this forward-thinking approach that’s key to successful investments. Gone are the days where putting your money in London would generate the highest yields and make the most money. Nowadays if you want to generate the high property yields, you need to stay ahead of the curve when it comes to property trends.
And that’s where we come in. At Fitzwilliam Capital Partners, we’re always ahead of the curve when it comes to property investment trends. We specialise in creating highly successful property schemes across the UK, building in areas where buy-to-let growth and high returns are anticipated.
From developing various successful properties in Leicester where investor’s yields are still on the rise, to identifying some of the north’s up and coming towns and cities such as Doncaster, Halifax, Pontefract and Sheffield, we really know what we’re talking about when it comes to property investment – and we want to help you.
How Fitzwilliam Capital Partners Can Help
Whether you’re an experienced investor who’s looking to add to your portfolio, a first-time investor, or a buyer wishing to purchase your own home, our knowledgeable team can help you find the ideal property at the right price.
Get the most out of your property purchase. Contact us today to learn about how we can help you find an exciting investment property in the UK.