Peterborough Buy-to-Let Guide

According to housesforsaletorent.co.uk, the average monthly rent in Peterborough in early 2024 is £979. This puts Peterborough slightly below the UK average rent of £1,279 PCM, as calculated by the HomeLet Rental Index.

Peterborough has experienced a sizable increase in the cost of renting over the past few years. According to the BBC, it increased by 10.5% in the past year. This steep climb is attributed to an imbalance of supply and demand. On average, there are far fewer rental properties on the market than there were previously, and demand continues to grow due to unaffordable mortgages keeping renters in the market. This suggests that rents will continue to increase for the foreseeable future.

Peterborough is comparatively affordable in the East of England region and has convenient transport links for trips to London, as the capital is just a 50-minute direct train ride away. These factors make Peterborough an attractive place to renters and UK property investors alike and have lured some commuters seeking somewhere with a lower cost of living.

The city is also known to have some of the best average rental yields in the region. A study by Zoopla puts it in joint first place with Great Yarmouth for the East of England, with an average gross yield of 5.93%. Other areas of interest such as Hull investment properties and people looking to invest in Bradford are becoming popular.

Peterborough consists of the city centre and some inner-city suburbs, surrounding suburbs formed from old townships, and some villages on the outskirts.

Some affordable properties can be found in the City Centre, and the area boasts good local amenities and transport links.

The surrounding suburbs include Werrington in the North and Hampton and Orton, some of Peterborough’s most popular areas, in the South.

The outer villages are also in demand as they offer good access to the City Centre and residents can enjoy a more rural lifestyle.

Peterborough City Centre (PE1)

Average Property Prices in Peterborough City Centre

The average property price in this area is £206,791.

Average Rental Yield in Peterborough City Centre

The average rental yield in this area is 6.35%.

Average Property Prices in Werrington

The average property price in this area is £252,176.

Average Rental Yield in Werrington

The average rental yield in this area is 4.05%.

Regeneration

Peterborough’s local government plans to revitalise the city with various regeneration projects to boost local jobs and infrastructure. Peterborough has benefited in the past from various regeneration efforts across the area. One example is the Embankment Masterplan, which added a new campus to Anglia Ruskin University and a new park to the area.

Ongoing and future projects include a £48 million investment from the Levelling Up fund, which will transform Peterborough’s Station Quarter, and projects intended to improve infrastructure through the Towns Fund.

Regeneration announcements are usually good news for property investors. Investing in the area before regeneration begins and while property is more affordable, investors can benefit from increased rental demand and income and faster capital appreciation in the future.

More Information: Take a look at our Eco-Investment Guide for the latest on sustainability and the property market!

High Rental Yields

As previously mentioned, Peterborough is a relatively affordable city when compared to other parts of the region. This comparatively cheaper property, combined with the high rental income that can be achieved due to high demand, has created the conditions for the best average rental yield in the East of England.

Rental yields are one of the important considerations for a buy-to-let investor to think about when it comes to choosing the most suitable location for an investment. High-yielding areas such as Peterborough are ideal for ensuring a maximum return on investment.

There are many advantages to investing in new-builds, but they are often much pricier than older or renovated residential properties.

Off-plan property investment is an affordable method of investing in newly-built properties. With this process, investors will secure a property early into construction, usually at a price discounted from standard property market rates.

Getting involved this early means higher capital appreciation on offer at a lower cost. Typically, the closer an off-property brings to completion, its value will increase. As mentioned, this property type usually generates huge interest from tenants, which could lead to higher rental yields in the long run.

Most experts agree that the best off-plan areas are those with thriving infrastructure and significant ongoing regeneration schemes. While there is some potential for off-plan and new-build investment in Peterborough, it may be more beneficial for investors to consider UK cities with more concentrated levels of new-build developments – such as Liverpool or Manchester.