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Derby Buy-to-Let Guide

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    Everything You Need to Know About Derby Buy-to-Let

    Derby is one of the smaller cities in the United Kingdom. It is the biggest city in Derbyshire, though Matlock serves as the county town.

    Today, we’ll be looking at the buy-to-let property market in this city. We’ll cover rental market demands and property statistics, as well as go over popular amenities within the city. We’ll also look at why Derby is attractive to tenants and investors on the lookout for buy-to-let opportunities in the UK.

    Are you a buy-to-let investor thinking about jumping into the Derby property market? We’ve got you covered.

    Let’s get started.

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      Derby riverside

      Buy-to-Let Property Prices in Derby

      According to the Zoopla House Price Index, Derby has an average property price of £230,606. The national average is £261,500. Zoopla observed both figures over the same period of time, making Derby 12% cheaper than the average UK property.

      Let’s look at those Derby property prices in greater detail.

      Firstly, detached houses are the most expensive property on average, costing £355,733.

      Next up, semi-detached homes cost £211,892 on average.

      Terraced houses cost around £161,119 on average. Finally, flats cost £123,471.

      However, the Land Registry puts UK house prices at £287,546. Meanwhile, the same index puts Derby prices at £199,448 on average. These figures suggest Derby may be considerably cheaper than the national average.

      UK house prices have risen 1.2% in the last year. However, Derby property prices have only risen by 0.2%. The East Midlands region has experienced 1.6% property growth. By those figures, the Derby housing market is underperforming. Learn more about how to make money from property with our free guide.

      Derby prices are cheaper, but capital appreciation is much slower.

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      Derby residential area

      Buy-to-Let Rental Market in Derby

      The Derby rental market statistics make for good reading for tenants.

      Home puts average Derby property rents at £876. The East Midlands as a whole has an average rental income of £840. The region has seen a 7.6% annual rental growth over the last 12 months.

      These figures are much lower than the national average. The UK’s annual rental growth was 10.30%. In addition, the average rental price was £1,243.

      Good news for tenants but not landlords.

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      Derby riverside

      Buy-to-Let Investment in Derby: Area Breakdown

      Still interested in a Derby property investment? Be sure to research different areas. This gives you the best chance of a healthy rental yield and capital growth.

      Derby City Centre

      The Derby city centre property market is less lucrative than other major cities. Investors can add new-build units and apartment conversions to their property portfolio. Terraced and traditional houses are available on the edges of the postcode. Some of these are now HMOs and blocks of flats.

      The council plans to improve city living investment prospects with 2,200 new homes built by 2028.

      Average Property Prices in Derby City Centre

      The average property price in DE1 is £181,657.

      Flats cost £139,540. Terraced houses cost £187,967. Semi and detached properties cost £226,278 and £280,000 respectively.

      These statistics are accurate as per the Zoopla House Price Index.

      Average Rental Yields in Derby City Centre

      The average rental price in Derby city centre is £895.87 pcm (according to Houses for Sale to Rent).

      The average rental yield in DE1 is 5.9%.

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        Derby street view

        North Suburbs

        Derby’s northern suburbs have good transport links. Locals can access the A52 heading to the M1, A38 and the Derbyshire Dales. This area includes the following townships and localities:

        • Allestree
        • Darley
        • Darley Abbey
        • Little Chester
        • Derwent
        • Breadsall Hilltop
        • Oakwood

        Allestrees has proven popular with locals looking for suburban homes. The area includes two parks and the Park Farm shopping centre.

        Little Eaton and Duffield sit further north. They are also popular with residents commuting into the city.

        Average Property Prices in North Suburbs

        The DE22 postcode is one of the more expensive areas in Derby. Zoopla puts the average price at £256,558.

        Detached houses sell for £425,249. Semi-detached homes go for £243,803. Terraced properties and flats are much cheaper. They sell for £160,993 and £123,934 respectively.

        Average Rental Yields in North Suburbs

        Houses for Sale to Rent puts the average rental income at £808.

        Based on these statistics, property investors can expect rental yields of around 3.8%.

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        Elvaston, Derby, Derbyshire, England, UK. February 9, 2018 Front view of Elvaston Castle on a sunny day with surrounding green parkland and blue sky

        East Suburbs

        Derby’s eastern suburbs include the following areas:

        • Pride Park
        • Chaddesden
        • Wimorton
        • Spondon
        • Borrowash
        • Alvaston
        • Alvaston Village
        • Alvaston Moor

        These areas allow easy access to the city centre and M1. They also connect to other cities like Nottingham and Loughborough in central England.

        Chaddesden is Derby’s largest suburb. The area features several housing estates. Spondon is set for redevelopment due to the British Celanese industrial site. It also has a railway station that connects to Derby, Nottingham and the rest of the country. Borrowash is actually part of the Erewash area. But, it is still popular with those commuting to Derby.

        Average Property Prices in East Suburbs

        Eastern suburbs include the postcodes DE21, DE24 and DE72.

        Average property prices in these areas are as follows:

        • DE21: £234,924
        • DE24: £184,824
        • DE72: £333,225

        All figures found on Zoopla.

        Average Rental Yields in East Suburbs

        DE21 has an average rental price of £1,126 pcm. This results in a yield of 5.8%.

        DE24 rental prices are £741 pcm on average. Rental yields are 4.8%.

        DE72 has average rental prices of £879 pcm. Rental yields are lower than in other parts of East Derby. They stand at 3.2%.

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          Derby riverside

          West Suburbs

          Western Derby suburbs include these areas:

          • California
          • Markeaton
          • Littleover
          • Mickleover
          • Mackworth

          Mickleover and Littleover have grown into suburban housing areas in recent years. Originally, there were rural villages. These locations allow good access to Burnaston (home of the Toyota plant) and the A38. These areas attract families and professionals who are happy to commute. For commercial opportunities why not read about buying property through a limited company.

          Average Property Prices in West Suburbs

          This area covers the DE3, DE22 and DE23 postcodes. We’ve already covered the DE22 and DE23 property prices and yields earlier in the article.

          DE3 average property prices are £294,924 according to Zoopla.

          Detached houses cost £378,643. Semi-detached can be bought for £251,254. Terraced and flats cost £203,080 and £132,714.

          Average Rental Yields in West Suburbs

          Average rents in DE3 come to £949 pcm. Therefore, yields are 3.9%.

          DERBY, ENGLAND - SEPTEMBER 13, 2019: View towards the cathedral from Iron Gate (street) in Derby, England

          South Suburbs

          Derby’s southern suburbs include:

          • Rose Hill
          • New Normanton
          • Normanton
          • Pear Tree
          • Sinfin
          • Sinfin North
          • Stenson Fields
          • Osmaston
          • Allenton
          • Chellaston

          The Rolls Royce and Bombardier industrial sites are in this area.

          South Derby’s inner-city areas attract buy-to-let investors due to low property prices. As you approach Chellaston, prices get more expensive.

          Average Property Prices in South Suburbs

          Average property prices in this area are as follows:

          • DE24: £184,824
          • DE65: £281,454
          • DE73: £285,081

          All figures courtesy of Zoopla.

          Average Rental Yields in South Suburbs

          DE24 has an average rental cost of £741 pcm. This puts the yield at 4.8%.

          DE65 commands an average rent of £829 pcm, putting the yield at 3.5%.

          DE73 has an average rent of £1,047 pcm. The yield stands at 4.4%.

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          Why You Should Consider a Buy-to-Let Investment in Derby

          Derby boasts a population of 274,000 people. Estimates predict the population to rise to 312,000 before 2040. Demand for property will only increase – good news for buy-to-let investors.

          But there’s many factors to consider when buying rental property, so we’ve listed some of Derby’s attractive points for investors.

          Industry

          Derby has a long history in the textile trade. This is why the football team’s nickname is ‘The Rams’. In addition, the city stood as one of the foremost places during the Industrial Revolution.

          In recent times, Derby has been known as one of the country’s manufacturing hubs. Notable employers in the area include:

          Rolls Royce
          Toyota Motors
          Bombardier Transportation
          Royal Crown Derby

          Derby City Council and the University Hospitals of Derby and Burton also contribute to the local job market.

          Transport Links

          Derby is well-positioned as a city in the East Midlands. The area attracts companies and employees due to its proximity to the M1, A38 and A50. The East Midlands Airport is one of the busiest in the country. Travel time to London is under three hours. Commuters can also get to Birmingham in less than an hour.

          Buy-to-let investors may benefit from the number of commuters choosing Derby for these reasons.

          Leisure

          Derby serves as the main retail hotspot in the county. Friar Gate is the heartbeat of the city’s social life. Intu Derby has lots of shops, restaurants, cafes and other attractions. The Cathedral Quarter attracts people looking for independent shopping and a slice of culture.

          Regeneration

          Derby City Council plan to invest heavily in the city’s regeneration. The City Centre Masterplan 2030 is set to improve the city centre and usher in new jobs and homes. This will make the area more attractive to those seeking urban living.

          The Becketwell scheme should also introduce new properties, offices and leisure spaces in the city centre.

          Student

          Derby is a university city. The University of Derby has over 20,000 students. The Allestree campus sits north of the centre. The university also has a smaller campus in Buxton. Student property investors may do well in popular areas such as Uttoxeter New Road, the city centre and Allestree.

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            Derby New-Builds

            In recent years, newly built developments have risen in popularity within the rental market. With certain advantages over older residential properties, this investment type has garnered significant interest from investors and tenants alike.

            These brand-new developments require almost no maintenance, leading to a faster turnaround for new tenants to move in and for investors to start seeing returns.

            In Derby, there are plans to boost new housing developments within the region. In 2024, Derby City Council outlined plans to transform a former school playing field into accessible and affordable housing. Once approved and completed, this could further boost the local infrastructure and rental market in the long term.

            Considering recent rental market trends, investing in newly constructed such as these could lead to substantial capital appreciation and robust rental returns.

            Read More: Discover more about this investment trend with our recent buy-to-let guides, covering everything from new-builds in Crosby to the latest UK hotspots!

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              Off-Plan Property in Derby

              New-build properties have many advantages over older residential properties but often come at higher prices. One way for investors to see more affordability with new-builds is to invest off-plan.

              Off-plan property investment allows investors to purchase properties early into construction, usually at a rate well below standard market prices. Getting involved this early also allows for higher levels of capital appreciation. Typically, the closer an off-plan property gets to completion, the more its value will increase.

              As mentioned, newly built developments will often see higher levels of tenant interest, which could lead to investors seeing more substantial rental returns.

              The majority of market analyses have found the best off-plan opportunities are typically found in densely populated cities, particularly those boasting vibrant infrastructure and prominent regeneration projects. While there is some potential for off-plan and new-build investment in Derby, investors may find more success in UK cities with more concentrated levels of new-build developments – such as Liverpool or Manchester.

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                How Does Derby Compare to Other UK Regions When It Comes to Buy-to-Let?

                As we mentioned earlier, Derby property prices are 12% cheaper than the national average. However, rental yields are only 4.6%, which is almost 0.6% less than the national average.

                But investors are more likely to choose major cities for an investment, meaning many in the area will opt to buy property in Birmingham instead.

                London is a popular choice but the extravagant price of buy-to-let property for sale in London can be off-putting.

                If property investors are considering city investment, they may want to turn their attention to the North West instead. Liverpool is a more attractive prospect to many people. This is thanks to top-quality universities and better job prospects.

                In addition, property in Liverpool for sale averages at about £156,300 (according to Zoopla). As such, Derby property prices are 33% more expensive than their North West counterpart. Liverpool also offers better rental yields at 7.77%.

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                  Want to Invest in Derby?

                  Derby offers an advantageous position in the middle of the country and relatively cheap housing. Yields are moderate, and may not be as lucrative as other parts of the country. However, there are some real bargains if you do some research.

                  Location is one of the key considerations when getting into property investment, so it’s worth researching some of the UK’s top buy-to-let hotspots:

                  Map of Derby

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                  Author

                  Dale Barham

                  Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

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