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Portsmouth Buy-to-Let 2024 Guide

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

    Portsmouth has a strong reputation as one of the best property investment destinations in South East England.

    Located in Hampshire on the south coast, this maritime location is the only island city in the UK. Portsmouth is known to harbour some of the best rental yields in the region, so it’s easy to see why the city has caught the attention of property investors.

    But can investors who dive into the Portsmouth property market expect plain sailing or tumultuous seas? This guide will give you a full lowdown on buy-to-let investment in Portsmouth!

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      Buy-to-Let Property Prices in Portsmouth

      According to Rightmove, properties in Portsmouth had an overall price of £282,037 over the last year. As of late 2023, the UK House Price Index recorded that the average UK property is worth £287,546, making Portsmouth property similar to the UK average.

      These prices are around 15% higher when compared to 2020 figures, so Portsmouth property has been growing in value in recent years. But is this trend set to continue?

      The market is currently experiencing some sluggishness, particularly pronounced in South England. Property experts Savills predict that growth will return to the UK property market in the next few years, but they believe that capital value in the South East region is set to grow by the second-lowest amount (16.7%) by 2028.

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      Buy-to-Let Rental Market in Portsmouth

      The average rent per month in Portsmouth is £1,458, according to housesforsaletorent.co.uk. This is a bit pricier than the UK average rent of £1,243 PCM, as per the HomeLet Rental Index, meaning that rental income can be high for buy-to-let investors in Portsmouth.

      According to Provestor, the City of Portsmouth has an average rental yield of 5.6% as of late 2023, the highest in the South East region.

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      Investment Properties for Sale in Portsmouth

      The rental market in Portsmouth offers a variety of property types, including terraced and semi-detached houses, as well as flats. However, as mentioned, prices in this region are notably high, meaning investors will likely find more affordable and higher-yielding investments elsewhere.

      In the past 12 months, properties in Portsmouth achieved an average price of £282,037. Among these sales, terraced properties were the most popular, selling for an average price of £285,426. Flats sold for an average of £197,127, while semi-detached properties fetched £378,416.

      Overall, sold prices in Portsmouth over the last year were 3% lower than the previous year and 5% higher than the 2021 peak.

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        Buy-to-Let Investment in Portsmouth: Area Breakdown

        Since Portsmouth is located on an island, the city itself is limited in space, so areas with green spaces are in high demand, especially for family homes. This includes suburbs like Baffins and Milton, which boast convenient access to some natural environments such as Milton Lake or Copnor to the north, which is close to the Great Salterns.

        The cramped image of central Portsmouth also drives tenants to the surrounding mainland. Across the bridge from Portsea Island are suburbs such as Port Solent, Cosham, Drayton, and Farlington, where residents can take advantage of more space and natural environments like the Farlington Marshes Nature Reserve. Even further out are some separate towns, such as Havant and Fareham. As these areas are located on the mainland, they have good transport links to both Portsmouth and Southampton.

        But the convenience of city living keeps the City Centre in demand. It is particularly popular with University of Portsmouth students, along with the beachside area of Southsea and suburbs like Fratton and North End. The inner-city area also includes the historic district of Old Portsmouth.

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          City Centre (PO1)

          Average Property Prices in City Centre

          £267,257

          Average Rental Yield in City Centre

          5%

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          Off-Plan vs Completed Property

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          Portsmouth Aerial View

          Fratton

          Average Property Prices in Fratton

          £219,964

          Average Rental Yield in Fratton

          6.92%

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            Portsmouth Residential Area

            Baffins

            Average Property Prices in Baffins

            £272,745

            Average Rental Yield in Baffins

            5.67%

            Copnor

            Average Property Prices in Copnor

            £257,165

            Average Rental Yield in Copnor

            6.00%

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              Farlington Field View

              Farlington

              Average Property Prices in Farlington

              £428,849

              Average Rental Yield in Farlington

              2.98%

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

              What is the Best Area of Portsmouth to Invest in?

              Property on the nearby mainland in areas like Farlington seems to have disappointing yields due to the expensive property prices. But suburbs on the island of Portsea are more generous, usually offering between 5 and 6%.

              As covered by the PO1 postcode, Portsmouth City Centre can give a decent rental yield. However, certain inner city suburbs such as Fratton are the most attractive to investors as they have much higher yields than the area as a whole, hitting nearly 7% on average.

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

                Ongoing Regeneration

                Eco-investment opportunities are on the rise in Portsmouth, with the city benefitting massively from the effects of regeneration in recent years. With a steady stream of ongoing projects, this positive development of the city will likely continue.

                Plans for the city centre are currently underway with ambitions to make the north district the most sustainable city district in the UK. This will incorporate new green spaces and eco-friendly travel options. The Portsmouth City Council also has their eyes on reinvigorating the high street and supporting creative community spaces south of the city centre.

                A new suburb is materialising on unused land at Tipner West and Horsea Island East to create more new homes for the growing population. Government funding has also been secured for the development of the Linear Park, which will become the longest urban park in the UK.

                Growing Population

                Portsmouth is the most densely populated city in the UK, even beating out London, and current and future investment is set to attract even more potential tenants to the pool of Portsmouth renters.

                The city faces an undersupply of housing, meaning there is a sizable demand for rental properties, which could lead to fewer gaps in tenancies and a more consistent rental income for buy-to-let investors.

                Portsmouth rents are already higher than the UK average, but this demand will likely push up rent even further, making for even stronger returns on investment.

                Buy-to-Let Investment Guide

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                Off-Plan vs Completed Property

                The ultimate guide to help you choose whether to invest in off plan or completed property in 2024.

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                New builds

                Portsmouth New-Builds

                Investing in new-build properties is an emerging trend within the UK real estate market, captivating both tenants and landlords alike. As these properties are newly constructed, there is minimal need for repair or renovation before they are market-ready. This means that tenants can move in faster, and investors can see a quicker turnaround on rental returns.

                As demand continues to outpace to supply, the need for new housing opportunities grows stronger. There are various housing and regeneration developments in Portsmouth that aim to address this issue and meet the growing population of the region. For instance, the redevelopment of 56 Arundel Street in Portsmouth City Centre plans to deliver a moddern 22-floor residential tower and is expected to boost local infrastructure and elevate the rental market.

                Considering the present market dynamics, choosing new-build properties could be a favourable opportunity for investors in the coming years.

                While Portsmouth presents various new-build investment options, major metropolitan cities like Liverpool and Manchester might offer broader investment prospects and higher capital appreciation.

                Find Out More: Learn more about this investment trend with our recent buy-to-let guides, covering everything from new-builds in Ipswich to the latest UK hotspots!

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                  Off-Plan Property in Portsmouth

                  While new-build properties typically garner significant attention, they frequently come with premium price tags compared to older residential developments. One avenue for accessing newly constructed properties at a more affordable cost is through off-plan property investment.

                  This approach involves purchasing a property at an early stage of development, often before construction begins, enabling investors to secure it at a discounted rate relative to standard market prices.

                  Investing in off-plan properties presents the potential for substantial capital growth upon completion. Typically, as a property nears completion, its value tends to increase. Moreover, in sought-after locations, there is often robust tenant demand, potentially resulting in higher rental yields over time.

                  The most promising off-plan investments are typically found in areas with established infrastructure and emerging rental markets. Areas undergoing regeneration are often representative of greater potential for future new-build developments and capital appreciation.

                  While there may be some opportunity for off-plan investment in the Portsmouth rental market, investors might discover greater profitability and capital appreciation by focusing on UK cities with a higher concentration of forthcoming new developments.

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

                  While the Portsmouth area can offer some of the best gross rental yields in the Southeast region, the average yield is significantly lower than those in major northern cities. For comparison, according to Provestor’s UK rental yield ranking, Portsmouth’s average is 5.6%, while Liverpool’s is 7.02%.

                  Other regions, such as the North West, are also forecasted to outstrip the South East when it comes to capital growth. Property experts Savills predict that capital value in the South East region is only set to grow 3% up to 2027, while the North West is forecast to increase by 11.7% in the same timeframe.

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                    Want to Invest in Portsmouth in 2024?

                    So, is Portsmouth the best place for UK buy-to-let?

                    Compared to other South East cities, Portsmouth is like a hidden treasure. There are high-reward investment opportunities to be unearthed if you choose your area wisely.

                    However, in the UK, Portsmouth is far from the most lucrative buy-to-let city in the country. Cities in the North, such as Liverpool and Manchester, can offer cheaper than average property prices, higher rental yields, and more considerable capital growth, making them more attractive prospects to property investors.

                    Navigating the complex landscape of buy-to-let investments can be challenging. To alleviate the complexities, RWinvest has meticulously crafted a collection of informative guides and articles to empower you to make informed decisions throughout the investment process.

                    See our latest insights below:

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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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