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Leicester City Buy-to-Let Guide

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    Investing in Leicester

    Leicester City – the resting place of Richard III and the sight of one of the greatest footballing miracles of all time.

    This East Midlands city has plenty of good things going for it such as attractive property prices and diverse and plentiful amenities. Much like North West England, housing prices in Leicester are slightly below average. However, the city is well-placed for commuters who seek to enjoy the economic benefits of the capital and other parts of South East England.

    This guide will look at all the reasons you may want to invest in buy-to-let properties in Leicester, including the most recent rental demand figures, population growth projections, and property values.

    Read on for more information.

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      Buy-to-Let Property Prices in Leicester

      According to the Zoopla June 2023 House Price Index, Leicester’s average house prices sat at £227,800. This is in stark contrast to the national average which stood at £261,500. In addition, the East Midlands boasted a 1.1% annual change in house prices. In contrast, other regions such as London and the South East saw a negative change in house prices at -0.6% and -0.3% respectively.

      As you can see, Leicester’s house prices dance to their own upbeat rhythm, proving to be an affordable buy-to-let option compared to other places in the country. While the average price may not be as affordable as northern cities like Liverpool and Manchester, Leicester represents excellent value for money, especially when you consider the convenient links to major cities such as London and Birmingham.

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        Buy-to-Let Rental Market in Leicester

        With a striking shortage of homes available for rent or purchase, property investors are in for a treat.

        Leicester City Council set an ambitious goal of constructing 39,400 new residences between 2020 and 2036, responding to the UK Government’s call for increased housing supply. However, even though the city is bustling with growth, it’s running out of space to accommodate all these new homes.

        Yet, the city still remains a real estate hotspot. Despite a minor adjustment to targets, Leicester’s property market boasts an annual rental growth of 3.02%, with each year bringing even more promising returns. Pair that with an average rental yield of 4.19% and an impressive house price growth rate of 6.28%, resulting in a total yield of 10.47%.

        So, whether you’re tapping into the rental property scene or eyeing the resale market, Leicester remains an enticing city for buy-to-let investors.

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        Buy to Let Investment in Leicester: Area Breakdown

        The Leicester property market is like most major cities, albeit with a few anomalies. The cheaper properties are based in the city centre, while the suburbs and fringe areas are home to mid-market and more expensive buy to let houses for sale.

        Let’s look at them in more detail.

        Leicester City Centre

        Leicester boasts a cosy yet thriving inner-city housing market that’s brimming with potential. Think sleek city living flats, some positioned by the scenic waterside.

        In addition, a colossal regeneration project worth £500 million is already in motion. The project will span five years and lead to the creation of up to 3,000 additional city living flats at the core. As such, this exciting development could open the doors to enticing off-plan buy-to-let investment prospects.

        Average Property Prices in Leicester City Centre

        According to Zoopla, the average property prices in Leicester city centre range are £208,023.

        Average Rental Yield in Leicester City Centre

        The city centre boasts cheap properties with healthy rental profits. The LE1 typically generates a 5% yield. It is no surprise that Leicester is one of the best buy to let areas in the UK in 2024.

        The Suburbs

        Leicester has two popular suburban areas: the western suburbs and the southern suburbs.

        The western suburbs are a stone’s throw away from the M1, perfect for commuters seeking motorway access. The neighbourhood boasts bustling business parks that offer a plethora of job opportunities.

        The locale is popular with families, thanks to charming areas like Thorpe Astley, Glenfield, and the notable Braunstone Town – a spacious post-war social housing enclave that adds to the neighbourhood’s distinct character.

        The southern suburbs cover London Road and Harborough Road. They are one of the most popular areas for buy-to-let properties, due to some tidy districts. For instance, Stoneygate and Knighton are great for young professionals who need access to the city centre. They also have a healthy student population.

        If you look further south, Wigston and Oadby offer countryside views at a mid-upper price point, appealing to buy-to-let investors and tenants alike.

        Average Property Prices in the Leicester Suburbs

        Zoopla puts the average property prices in LE2 at £288,421. In addition, average house prices in LE3 stand at £251,284.

        Average Rental Yield in the Leicester Suburbs

        The average rental yields in both suburban areas range between 3% and 4%. The LE2 (Oadby, Knighton, Highfields, Aylestone, Eyres Monsell, Glen Parva, Stoughton, Little Stretton) and LE3 (Braunstone, Glenfield, New Parks, Groby Road, Leicester Forest East, Westcotes) postcodes tend to fetch a 4% yield. These factors have influenced the buy to let costs in general within the property market

        North and North East Leicester

        Northern parts of Leicester feature the broadest spectrum of properties at various price points, meaning there is plenty of room for buy-to-let investors regardless of their capital or investment strategy.

        For instance, St. Matthews and Highfields are inner-city areas with high levels of poverty and deprivation.

        In contrast, Birstall features mid-priced properties in residential locations, while Anstey and Groby blend village aesthetics with sought-after access to the M1 and city centre.

        Average Property Prices in North and North East Leicester

        North and North East Leicester property prices are £250,314 in LE4 and £270,168 in LE5, as per Zoopla.

        Average Rental Yield in North and North East Leicester

        The average rental yield in LE4 stands at 4.3%, while LE5 offers a rental yield of 4.1%.

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

        Leicester, a vibrant city with a rich history, is on a path of growth and transformation. Currently home to a population of more than 566,000, the UN predicts that this thriving metro area is set to expand to over 600,000 residents by 2035. This projected growth speaks to Leicester’s enduring appeal.

        In terms of education, Leicester shines as a prominent student city, ranked among the UK’s top three. The city’s attraction to students ensures a robust student accommodation market. With approximately 17,000 students, the University of Leicester, along with De Montfort University, boasting around 22,000 students, offers a bustling academic scene.

        Both universities have strategically positioned campuses near the city centre, surrounded by numerous student accommodation options. Noteworthy areas for privately rented student housing include Clarendon Park, Stoneygate, North Evington, Highfields, Aylestone Park, Oadby, West End, and Leicester city centre itself.

        Leicester’s Industrial Heritage

        In the 19th century, the extensive rail and canal network transformed Leicester into a manufacturing hub, particularly in engineering, shoemaking, and hosiery. This expansion spread into urban and rural areas through factories and workshops, earning Leicester the nickname “The City that Clothes the World.”

        Today, engineering remains vital to the city’s economy, spanning machine tools, control systems, foundry equipment, rail components, and clocks. Local businesses offer apprenticeships that link industry with academia, strengthening ties with university engineering departments for practical and theoretical growth.

        Nowadays, this legacy has evolved into a dynamic, modern economy centred around light manufacturing, services, and distribution. This shift has contributed to a positive impact on both employment numbers and the buoyant property market.

        The city proudly houses some of the UK’s major employers, including household names like Next, Sytner Group, Dunelm, and Walkers.

        Leicester Is Good for Growth

        Notably, Leicester garners further recognition in the 2023 Good Growth for Cities Index, claiming the top spot in the East Midlands for its exceptional quality of work and life. The index, evaluating income distribution, safety, work-life balance, and job opportunities, underscores Leicester’s thriving atmosphere and potential as a lucrative property investment area.

        A Leicestershire City Steeped in History and Culture

        When you think of a bustling city with vibrant shops, restaurants, and captivating cultural landmarks, Leicester undoubtedly fits the bill. But guess what? There’s more to this city than meets the eye – an enchanting visitor economy intertwined with rich history and contemporary wonders.

        Unveiling the lesser-known chapters of Leicester’s story, beneath the area’s modern façade lies a historic Roman city dating back to AD47. And that’s not all – the city proudly cradles the resting place of none other than Richard III, adding a touch of regal intrigue to its narrative.

        Retail and Leisure in Leicester

        Ranked 13th in the UK’s retail shopping league, Leicester City boasts two large shopping centres, The Haymarket Centre and The High Cross Centre, featuring high street stores, designer outlets and local independent establishments. The city offers theatres, cinemas, art galleries, historical monuments, and museums.

        In addition, Leicester is home to a thriving grassroots music scene, with bars like The Musician Pub, The Soundhouse and The Donkey attracting local and touring bands. Meanwhile, De Montfort Hall and the O2 Academy regularly draw more popular acts.

        Its culinary scene is diverse and multicultural, serving various tastes. Additionally, Leicester offers a variety of outdoor experiences with its botanic gardens, a city farm, a canal and river, and a country park.

        Leicester City – A Sports and Science Hub

        While Leicester City FC might command the spotlight thanks to their 2016 Premier League heroics, there’s another team that’s equally revered – the legendary Leicester Tigers rugby club. It’s not just about sports, though. In addition, the National Space Centre sits right in the heart of Leicester.

        The renowned Golden Mile is a true jewel in Leicester’s crown. This stretch of Belgrave Road is adorned with an array of Asian restaurants, boutiques, and jewellers. The Diwali celebrations held here are rumoured to rival those in India itself, painting the Leicester city centre with a mesmerising symphony of colours.

        Buy-to-Let Properties With Excellent Transport Links

        Situated at the heart of England, Leicester boasts fantastic transport links. With the M1, M69, and A46 right at its doorstep, you’re seamlessly connected. Fancy a quick jaunt to Birmingham? Hop on a train and arrive in just 47 minutes. London is also within easy reach, approximately an hour away. Why not view some of the latest buy-to-let properties that are available to buy in the UK?

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          Leicester New-Builds

          The ongoing imbalance between demand and housing supply has led to a growing need for new-builds across the UK.

          In late 2023, Leicester City bought a converted factory for new affordable homes in an effort to create 58 flats and bedsits and boost the local rental market.

          New-build properties such as these can sometimes be priced higher than standard residential properties but often require less upkeep and maintenance from the owners.

          Equally attractive for tenants, new-builds are also usually outfitted with the latest popular design trends and amenities.

          Further Reading: Get the latest insights into this investment strategy with our latest buy-to-let area guides, covering everything from off-plan property in Chester to the latest UK hotspots!

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          Off-Plan Property in Leicester

          As mentioned, new-build properties are likely to see greater interest from investors and tenants alike due to their advantages over standard residential properties. The downside is that they usually come at a higher cost than most other property types. 

          One way investors can mitigate the cost of investing in new-builds is through off-plan investment.

          An increasingly popular investment tactic, off-plan investing involves purchasing a property while still in the development/construction phase. The most significant advantage to this is that investors can usually pay a price well below market levels.

          Flexible payment plans are also available, increasing the likelihood of a more affordable investment.

           

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

          Leicester is both in the middle of the country and the middle of the road when it comes to the buy-to-let market. While property prices are much more affordable than in the likes of London and other southern regions, Leicester is still considerably more expensive than the likes of Liverpool (with average prices of £156,300 as of June 2023) and Manchester (£220,300).

          In addition, Leicester’s moderately healthy rental yield of 4.19% is good, but it pales in comparison to those North West cities which garnered 6.1% and 5.4% yields respectively.

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            Want to Invest in Leicester in 2024?

            The Leicester region emerges as an enticing location for buy-to-let investors seeking a blend of financial possibilities and community charm. Its diverse neighbourhoods, strategic locations, and ongoing urban transformations indicate a city on the rise.

            With a welcoming market and potential yields that whisper promises of financial growth, Leicester stands as an open invitation for those looking for buy-to-let investment opportunities. Whether you’re a seasoned investor or just dipping your toes into the waters of the property market, Leicester’s vibrant landscape could lead to substantial capital appreciation and healthy rental yields.

            If you are looking to get into property investment, RWinvest can help.

            With over 20 years of experience and a proven track record with stunning buy-to-let properties, RWinvest makes investing in the property market easy and hassle-free. In addition, investors gain access to exciting developments in sought-after and up-and-coming areas, taking advantage of booming business sectors and cities with a thriving student populous.

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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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