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Preston Buy-to-Let Guide

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    Everything You Need to Know About the Preston Buy-to-Let Market

    Once a booming industrial town, Preston is known in the modern day as a small but thriving student city in Lancashire.

    It has been identified previously as an area with some of the lowest property prices in the UK, naturally bringing it to the attention of savvy investors. Combine that with a sizable student population, and Preston is currently building up a reputation as a hotspot in the buy-to-let property market

    But how does it stack up in reality? Our guide will walk you through Preston as a buy-to-let property investment destination.

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      Preston

      Buy-to-Let Property Prices in Preston

      Property prices are generally generally more affordable in the North West than other parts of the UK, especially the South. The price tag of a property in Preston is even lower again, offering some of the cheapest prices in the North West.

      According to Rightmove, Preston properties had an overall average price of £168,132 over the last year. This is 2% down on the previous year and 7% up on 2020. This is much lower than the UK average of £261,500 calculated by Zoopa for the July 2023 UK House Price Index.

      Growth has stalled somewhat this year, but property price forecasts point to rising capital growth in the future across the UK market, making now a good time to invest.

      Stuck on whether property is still a good investment in 2024? Take a look at the market overview below to learn more! Or check out our property investment tips!

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      Preston hall

      Buy-to-Let Rental Market in Preston

      The average rental yield in Preston is around 4.4%, which is above the UK average. Depending on the area, this can be even higher, with property in the city centre reaching about 6.4% on average, as per Property Data. 

      Across the UK, demand is outstripping housing supply, pushing average rents up. Demand has risen so much in Preston in recent years that in 2020, it displayed one of the most rapid rises in average rental costs in the country. According to housesforsaletorent.co.uk, the average rent in Preston now stands at £832 per month.

      Preston has a reputation as a friendly and convenient place to live, and its proximity to other major North West cities makes it even more attractive to renters. Preston residents skew a bit older than the average for UK cities, but the local government hopes to attract more young professionals through regeneration and maximising employment opportunities.

      One of the main drivers of rental demand in Preston is the sizable student population. The University of Central Lancashire is one of the largest universities in the North West, and its presence has completely changed the local makeup of Preston, transforming it into a bustling student city.

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      Buy-to-Let Investment in Preston: Area Breakdown

      The area around Preston City Centre includes districts like Plungington, popular with students who want easy access to the university campus. It also has attractive areas around Avenham Park and inner-city suburbs like Deepdale.

      East Preston includes suburbs like Ribbleton, which is both a residential and commercial area. In the west, you can find areas like Ashton-on-Ribble. North Preston has Fulwood, and property gets more pricey as you reach the towns further from the City Centre.

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        Preston Street View

        Preston City Centre

        Average Property Prices in Preston City Centre (PR1)

        The average property price in PR1 is £163,478. 

        Average Rental Yield in Preston City Centre (PR1)

        The average rental yield in PR1 is 5.92%.

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        Preston Riverside

        Ashton-on-Ribble

        Average Property Prices in Ashton-on-Ribble

        The average property price in this area is £148,365. 

        Average Rental Yield in Ashton-on-Ribble

        The average rental yield in this area is 6.05%.

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          Ribbleton

          Average Property Prices in Ribbleton

          The average house price in this area is £143,047.

          Average Rental Yield in Ribbleton

          The average rental yield in this area is 6.36%.

          Preston, Lancashire. 06.20.2022 Preston North End Football Club, Deepdale Stadium. Aerial Image. 20th June 2022.

          Fulwood

          Average Property Prices in Fulwood

          The average house price in this area is £205,247.

          Average Rental Yield in Fulwood

          The average rental yield in this area is 5.1%.

          (Averages house prices taken from Zoopla, rental yield estimate calculated with figures from home.co.uk, housesforsaletorent.co.uk)

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            What is the Best Area of Preston to Invest in?

            Thanks to the affordable property prices, many areas of Preston have attractive rental yields. The city centre can offer steady student demand, and rental yields can reach much higher than the average if you choose a sought-after area. If you’re targeting the student population, the city centre is the best choice, as covered by the PR1 postcode.

            Suburbs in the city centre’s surrounding area, such as Ashton-on-Ribble and Ribbleton, are popular, and a good rental yield can be achieved. As you travel further away from Preston’s centre, you can find many upmarket districts with higher property prices, but decent yields are still possible.

            For a detailed breakdown, take a look at our guide to the best buy-to-let areas in the UK.

            What is a Good Rental Yield? Find Out in Our FREE Guide

            How to calculate rental yields, plus which UK hotspots offer the strongest rental returns.

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

            Student Population

            Preston is known as a thriving student city. The University of Central Lancashire (UCLan) is one of the largest universities in the North West, and it has become a major source of economic growth for the city through employment, housing, and retail.

            The 40,000-strong student population is estimated to make up over a quarter of all Preston inhabitants, making it a primary driver of Preston’s private rental market. Although targeting students has some downsides, such as frequently changing tenants, it is one way to ensure consistent rental demand for your buy-to-let property.

            Student properties can also command a higher rental yield than the average property. In 2021, Preston was named 9th on a list of top 10 university locations with the best yields, giving as high as 8.01%.

            Learn more about the best student property investments in our updated guide!

            Regeneration

            Often overshadowed by the neighbouring cities of Liverpool and Manchester, Preston is ambitious about being known as the North West’s third city. The amount of regeneration projects that have been recently completed or are currently ongoing is proof of this aspirational spirit. 

            The Harris Quarter Towns Fund Investment Programme is a £200 million transformational project set for completion in 2026. Focused on Preston’s Harris Quarter, it will revitalise the city’s cultural and leisure infrastructure with six individual projects.

            According to the UCLan Masterplan, the University of Central Lancashire has also been finishing up its own regeneration projects in recent years. In Summer 2021, a new student centre with an adjacent public square revamped the campus area for students and the local community.

            The area around Preston railway station is set to be upgraded, too, with an ambitious redevelopment plan on the cards. At the same time, the Stoneygate Masterplan will revitalise the suburbs close to the city centre by Avenham Park.

            Learn more about sustainability and investment with RWinvest’s Manchester Regeneration 2024 guide.

            Connectivity and Location

            A big part of Preston’s draw for renters is its location. Residents of Preston can drive or hop on the train and make it to Liverpool or Manchester in under an hour. It’s also convenient for visits to Blackpool and the Lake District.

            Preston is ideally located for travel by road as it sits on four significant motorways – M6, M61, M65 and M55. It’s easy to see why the area is home to many freight and haulage companies. The Preston Western Distributor Road scheme also finished this year, creating three new roads to ease congestion on the motorway network around Preston.

            Preston’s railway and bus network also offers good access to surrounding towns and cities. The city’s public transport links have proposed upgrades on the cards, such as a possible new train station called Cottam Parkway to be built on the north-west side of Preston.

            These transport-based schemes and projects will help make Preston an attractive place for renters and improve its image as a convenient hometown for commuters to nearby towns and cities. Why not also take a look at the RWinvest properties available in our Stockport buy-to-let guide.

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            Off plan property construction site with workmen

            Preston New Builds

            Demand for new-build properties to help address the undersupply of homes in the private rental market is growing nationwide. Many investors see this shift towards new builds as a favourable investment opportunity. So, how does Preston look for new-build investors?

            The local authorities have acknowledged the need for new builds in the city. Preston City Council has identified various areas for new-build housing as part of regeneration schemes.

            Although Preston is a student city, the local authorities are cautious about introducing too much new-build student accommodation to preserve the local character of the city’s residential areas.

            But as an in-demand city to live in, some new developments help make up for the shortfall in housing, including houses and apartment buildings. To get an idea of the new-build investment opportunities currently on the market, it may be worth looking at other North West towns and cities to compare them to Preston. For example, major cities like Liverpool and Manchester may have more diverse investment opportunities.

            What is a Good Rental Yield? Find Out in Our FREE Guide

            How to calculate rental yields, plus which UK hotspots offer the strongest rental returns.

            Off-Plan Property

            Off-Plan Property in Preston

            New builds are typically more expensive than older properties, with strategies like off-plan investment rising in popularity as a way to acquire newly built properties at a reasonable price.

            To find the best possible off-plan property deal, it’s worth widening the search beyond Preston and looking at the region as a whole. The North West has been identified as a promising location for buy-to-let investments moving forward, so it is a popular area for off-plan developments. For example, investors could look at off-plan property in Warrington and other smaller regional towns.

            However, off-plan investment opportunities in the North West are most likely found in major cities like Liverpool and Manchester. These are particularly popular areas for developers wanting to take advantage of the high demand in big Northern cities.

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

              In terms of up-and-coming smaller cities, Preston is one to watch. However, investors often turn to more major cities for investment security due to more stable rental demand and capital growth, along with higher average rents.

              The affordability of Preston is a big draw, but the average property price is comparable with Liverpool, a much more established city with similar rental yields. Liverpool is much more attractive to potential renters, with almost guaranteed high rental demand for the foreseeable future.

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                Want to Invest in Preston in 2024?

                Preston is an up-and-coming destination for property investment in the North-West of England. Property prices will likely rise with continued investment and regeneration efforts, making now a great time to invest in Preston.

                But Preston still has a long way to go compared with its more prominent neighbours, Liverpool and Manchester. Property can be found there with similar prices to Preston, and more rental demand keeps gross rental income high, making for more attractive rental yields in many cases.

                Finding the best place to invest in buy-to-let is personal to each investor, depending on your needs and what you hope to get out of the venture. Most investors will typically secure assistance from property investment companies to fully explore their options. 

                Looking to invest in property? Why not take a look at some of RWinvest’s latest insights?

                Map of Preston

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                Author

                Jessica Ferris

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

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