Cardiff Property Investment

Voted the UK’s most sociable city, Cardiff boasts a host of independent businesses, exciting events and vibrant cultural attractions. The proximity Cardiff has to several rural Welsh locations helps it stand out amongst other UK capitals. While the city is relatively small compared to other UK cities, this gives Cardiff a friendly and welcoming feel. With a growing scene of young professionals and students, along with a rich history, buying a property in Cardiff is becoming more and more popular with investors. It is quickly becoming a prime location for investing in property. Here, we explore some of the benefits of Cardiff property investment.

Cardiff History and Culture

From its roots as a small market town to its colossal port status in the 1900s, the capital city of Wales has consistently transformed over its history. Since Neolithic times, Cardiff has had human occupation with continuous settlement during the Bronze Age and Iron Age. Cardiff Castle has evidence of Roman construction, and in 1091, the ancient castle was rebuilt by Robert Fitzhamon. You can still see Cardiff’s long and varied history when walking down its streets.

The City Hall is one of the world’s most beautiful civic centres, and the beloved Cardiff Animal Wall was completed in 1892. The Victorian arcades of the Castle Quarter still house traditional independent businesses too. During Cardiff’s industrial prime, canals were running across most of the city. There are still some visible and underground. Cardiff was granted city status on 28 October 1905, and it has continued to grow and flourish.

Cardiff has a vibrant and dynamic art scene with many unique art spaces. Street art has continued to be a visible sign of Cardiff’s culture. The ‘Empty Walls’ festival brought over 20 street artists to the city centre to create a unique outdoor gallery, while the multi-artform cultural space – Chapter – is a state-of-the-art venue with over 80,000 visitors a year. This unique project is a Cardiff culture hub with more than 30 studio spaces and a cinema and gallery. St Fagans National Museum of History is the most visited heritage attraction in Wales, boasting over 50 rebuilt buildings from around Wales.

Regeneration and House Prices Cardiff

The Welsh Capital has a strong history of regeneration. In 1987, the Cardiff Bay Development Corporation was launched to regenerate the 1,100 hectares of derelict docklands sitting in Cardiff and Penarth. This formed one of the biggest regeneration schemes seen in both Wales and the entire UK. Thanks to the Cardiff Bay Development Corporation, the project is currently Europe’s largest waterfront development and is filled with a range of bars, restaurants and attractions.

Other key regeneration schemes include the redevelopment and investment into Cardiff transport. Recent Cardiff investment of £1 billion into the South Wales metro has made commuting into and around the city far easier. There have been numerous efforts to invest in Cardiff transport links to the rest of the country and around the city. Transport links are incredibly important for workers, making Cardiff an excellent place to live.

The regeneration seen throughout the city has likely helped contribute to the growth of house prices in Cardiff and the rise in popularity of Cardiff investment. In January 2020, it was recorded that house prices in Cardiff had increased more than any other Welsh city, with a growth of 41.2% over the last decade.

The Welsh Capital has seen some fantastic growth this year. In March 2023, Cardiff house prices sat at £256,993 on average, which was over 6% higher than in early 2022. As of 2024, Savills’ property price predictions reveal that house prices in Wales are set to grow by 21.4% by 2028 – a higher growth than London’s expected negative increase of 13.9%. This means that house prices in Cardiff will continue to grow over the coming years, making it an ideal place for buy-to-let investments.

Cardiff’s university sector has been one of the major driving forces in the city’s recent growth. Cardiff has three universities with a combined population of over 80,000 students. The prestigious Cardiff University is one of the UK’s classic red-brick universities. It is also the only Welsh institution to be part of the Russell Group. Cardiff Metropolitan University has over 12,000 students and has research and enterprise centres. The University of South Wales is another vibrant university, founded in 2013 after the merger of the University of Wales, Newport and the University of Glamorgan. Students have become a vital part of the city, making up 20% of the population and contributing £1.3 billion to the Cardiff economy.

Cardiff also has a high volume of international students – around 1,200 at Cardiff Metropolitan University and 7,000 at Cardiff University. The city’s universities have also continued to invest in Cardiff, with the Royal Welsh College of Music and Drama opening a £22.5 million facility in 2011. The University of South Wales also opened a £3.7 million sports park, and it has also invested over £170 million on its Cardiff campus. The continuing drive to invest in Cardiff universities and facilities has been an important factor in the city’s success.

The popularity of Cardiff’s student scene has led to a rise in demand for student accommodation. Over recent years, several new purpose-built student accommodation has been opened in the city, introducing new opportunities for those looking for student flats to buy in Cardiff.

Cardiff Demand From Young Professionals

A high student retention rate means that the demand for private rental accommodation doesn’t end at graduation. Many students who choose to settle in Cardiff after they finish university are looking for the same kind of high-quality residential accommodation they enjoyed while studying. This is why high-rise flats and luxurious modern studios prove another lucrative Cardiff property investment opportunity. In some parts of the city, 75% of housing is reportedly rented rather than owned. This considerable shift towards residents who rent has recently opened up many lucrative opportunities for those planning to buy a Cardiff rental property.

Cardiff Rental Yields

Cardiff’s CF43 postcode recently made the list of Totally Money’s best buy-to-let investments, ranking at number 11 with a 7.61% yield. Rental yields are one of the main elements of an investment that many people look for when deciding where to buy property. Cardiff property investment comes with some attractive options. Rental yields are calculated by taking the property price and rental cost of a property, with lower house prices and higher rental costs resulting in more substantial yields. With some of the most affordable properties in the UK market, along with a thriving scene of student renters, it’s easy to see why the buy-to-let Cardiff offers can bring impressive rental yields.

The average rent in Cardiff sits at around £1,107, meaning you can expect rental yields of about 5%. With Cardiff house prices at a very reasonable level and such high returns, it’s clear Cardiff property investment is an excellent choice to consider.

Cardiff City Centre

Population: 44,400

Average House Price: £203,291 (2023)

If you’re interested in Cardiff property investment and Cardiff properties to buy, the city centre is one of the best areas of Cardiff to consider for your buy to let purchase. According to Zoopla, the inner city offers some of the lowest property prices, with an average asking price of £203,291 and rental returns of almost 6%. This is far lower than the average house price in Cardiff. The city centre is popular with young professional and student tenants seeking a rental property in Cardiff, making it a good option for investors seeking high demand and low void periods.

Cathays

Population: 20,121 (2011)

Average House Price: £297,731 (2023)

Cathays is a popular student area in Cardiff, with tonnes of student property investment opportunities to choose from. Located within the inner city, Cathays is one of the best areas of Cardiff for buying property with high demand. Students looking for a rental property in Cardiff will often choose the Cathays area due to Cardiff University’s proximity, making it one of the best areas to live in Cardiff. While demand is high, however, property prices can also be high. It is considerably higher than the average house price in Cardiff. This doesn’t mean that there aren’t still affordable properties available, though, so savvy investors interested in Cardiff property investment should keep an eye out for the best deals. Rental yields are very respectable, too, sitting at a comfortable 5%.

Pentwyn

Population: 15,634 (2011)

Average House Price: £241,790 (2023)

Pentwyn is an area located in East Cardiff. It is known as one of the city’s more affordable spots compared to areas like Cathays. According to Zoopla, this suburban area offers house prices of £241,790, which is still below the national average that reached a record-breaking £250,000 in late 2020. However, the population of Pentwyn is on the smaller side, meaning you may run the risk of void periods in your investment property. The suburban nature of the area means that it’s more likely to attract older tenants such as families, which may mean you need to buy family homes and residential property rather than student accommodation. Rental yields are low, too, with the latest data estimating yields sit at 3%. If you’re hoping for high demand from students and young professional tenants, Cardiff city centre may be your best option with cheaper properties available.

Barry

Population: 54,000

Average House Price: £213,149 (2023)

While Barry is not located in the city of Cardiff itself, it’s a nearby area that is reachable in under half an hour. Due to the lower property prices and decent potential yields, Barry is a great area to consider if you like the sound of investing in Cardiff property but prefer a more rural location. This rural setting makes Barry one of the best areas to live in Cardiff.

Barry is a South Wales seaside town that gained recognition thanks to the 2007 BBC series Gavin and Stacey. The town attracts herds of tourists each year thanks to its coastal attractions and rich maritime history while also boasting a robust rental market with yields of around 4%, according to Zoopla’s latest figures. Barry is far cheaper than the average house price in Cardiff, making it a suitable place to invest.

For those looking to make a UK investment, choosing the best area to invest in can be tricky. While Cardiff property investment certainly has a lot to offer in terms of its student scene and capital growth potential, many investors may be seeking more from their buy-to-let investment. One of the most critical elements of any property investment is rental yields. Investors seeking the highest returns possible may struggle to find what they’re looking for in Cardiff.

For high rental returns, cities like Liverpool are the more popular option, with yields of up to 10% and six postcodes ranking in the Totally Money buy-to-let property areas list. In comparison, Cardiff’s highest rental yield stands at 7.61%. Capital growth is also more substantial in the North West, with an increase of over 27% expected by 2024. That’s 7% higher than the UK property national average and a higher growth rate than anywhere else.

The UK property market had a fantastic year in 2020, which was especially seen in the North West. Price growth rates and rental rises were high, with Homelet finding that in November 2020, rent had increased in the area by 5% compared to 2019. As of 2021, Liverpool property prices sat at a considerable 7.74% higher rate than at the start of 2020.

Cities like Liverpool and Manchester are widely considered the best places to invest in property in the UK, so if you want to know where to buy property, you should certainly consider the North West for the highest returns possible.

The North West is a property market powerhouse and offers some of the best property deals on the market. It is home to the largest regional economy outside of London and was ranked in the top 10 global emerging start-up ecosystems in 2020 for its business prowess. This has attracted tremendous interest from both UK residents and overseas investors. Manchester currently has the largest student population in Europe, with over 17,000 international students. Moreover, the University of Manchester has a fantastic graduate retention rate of over 51%. This all means Manchester and Liverpool property investment is perfect for any property investor and is undoubtedly the best place to invest in property in 2024.

On average, Liverpool property costs an incredibly reasonable £181,898. Likewise, Manchester property costs around £200,517, which is considerably lower than Cardiff’s average of £256,719. Simply the North West offers incredibly affordable house prices Cardiff simply can’t compete with. While the average rent in Cardiff is higher than the North West average, the region’s affordability and property growth are just too good of an opportunity to miss out on.

In this guide, we covered the best areas to live in Cardiff and showed both the good and bad areas in Cardiff to choose from. If you are looking for high yields and reasonable growth rates, Cardiff is an excellent area to consider investing. Cardiff house prices are incredibly competitive, and there are several excellent Cardiff properties to buy. However, the latest trends all point to the fact that it is not the best, with Liverpool and Manchester currently the greatest investments you can make in terms of affordability, growth rates, and yields.