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Peterborough Buy-to-Let Guide

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

    Peterborough has caught the eye of discerning property investors as one of the best areas to invest in when it comes to the East of England region.

    This Cambridgeshire city has a lot to offer in terms of UK buy-to-let investments, but is it all that it’s cracked up to be?

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      Peterborough Cathedral

      Buy-to-Let Property Prices in Peterborough

      According to Rightmove, in late 2023, the overall average property price in Peterborough over the past year was £249,077.

      This is 12% up when compared to 2020. In October 2023, the average UK property was worth £287,782, as per the UK House Price Index, which puts Peterborough property below the average when it comes to affordability.

      But will the Peterborough property market stay on the up? While capital growth in the UK property market has been sluggish recently, property experts Savills have forecast a return to stable growth over the next few years.

      Leading up to 2028, the East of England region where Peterborough is situated is set to grow 16.7%.

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      Buy-to-Let Rental Market in Peterborough

      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.

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        Investment Properties for Sale in Peterborough

        There are various property types on offer in Peterborough, ranging from detached and semi-detached properties to terraced properties. As mentioned, property prices here are slightly below the national average, meaning there could be greater affordability in terms of investment.

        According to Rightmove, in the last 12 months, properties in Peterborough had an overall average price of £249,077. The bulk of these sales were completed with semi-detached properties, averaging around £240,068. In comparison, terraced properties sold for an average price of £200,146, with detached properties fetching £370,664.

        On the whole, sold prices for Peterborough properties were similar to the previous year and 5% higher than averages in 2021 (£236,595).

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        Buy-to-Let Investment in Peterborough: Area Breakdown

        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%.

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          Peterborough street view

          Bretton

          Average Property Prices in Bretton

          The average property price in this area is £261,375.

          Average Rental Yield in Bretton

          The average rental yield in this area is 4.41%.

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          Peterborough seaside

          Werrington

          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%.

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            Hampton

            Average Property Prices in Hampton

            The average property price in this area is £270,402.

            Average Rental Yield in Hampton

            The average rental yield in this area is 4.16%.

            (Average property prices taken from Rightmove in late 2023, gross rental yield estimates calculated with figures from housesforsaletorent.co.uk in late 2023)

            What is the Best Area of Peterborough to Invest in?

            On average, many of Peterborough’s most popular areas can offer a decent rental yield. Property can be pricier in less central areas, but the average rental yields are still often over 4%.

            But the most lucrative area seems to be the City Centre, as covered by the PE1 postcode. The average property price in this area is significantly lower than the overall UK average, while the high demand from renters drives up rent, making for a solid average rental yield of over 6%.

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

            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.

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              Peterborough New-Builds

              New-build properties are gaining traction within the UK property market as demand outpaces housing supply. 

              As new-builds are recently constructed, they are usually outfitted with trending amenities and require little-to-none maintenance work before tenants can move in, leading to a faster turnaround on rental returns for investors.

              Recent data released by the Department for Levelling Up, Housing and Communities shows that more homes were built in Peterborough in Spring 2023 than in the previous year – around 230, an increase from the 200 completed in 2022.

              Looking at recent property market trends, investing in a recently completed property like this could lead to more robust capital growth and expansive rental returns in the future. 

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

               

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              Off-Plan Property in Peterborough

              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.

               

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                How Does Peterborough Compare to Other UK Regions When it Comes to Buy-to-Let?

                It’s clear that Peterborough is a property investment gem in a region full of expensive cities and towns. However, when it comes to capital growth, the North is predicted to significantly outperform other regions of England. While the East of England is forecast to grow 16.7% by 2028, Savills states that areas like the North West have the potential to grow by 20.2%. Capital gains are important to consider in order to maximise the return on investment when it comes time to sell the property.

                This can also be said of Peterborough’s rental yields. While they are comparatively high for the region, average rental yields in other cities can be much higher.

                For example, in late 2023, Zoopla states that the average rental yield in Liverpool was 7.21%, one of the highest in the UK.

                Further Reading: Delve further into the North West rental market with RWinvest’s look into investment property available in Blackpool!

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                  Want to Invest in Peterborough in 2024?

                  When it comes to the East of England region, Peterborough is an attractive location for buy-to-let. With relatively affordable property and good rental yields to be found, it’s a promising hotspot for investors looking for an investment property in this particular area of the UK.

                  But for buy-to-let investors open to looking further afield, many properties in northern regions, such as apartments for sale in Manchester City Centre and Liverpool, can offer a safer and more lucrative investment.

                  If you’d like to learn about other buy-to-let areas in the UK, check out some of our other buy-to-let guides:

                  Map of Peterborough

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                  Author

                  Jessica Ferris

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                  Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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