Although London has seen record growth in rental prices between 2021 and 2022, it is worth remembering that investing in the London rental market comes at an increased upfront cost compared to the rest of the country.
This means that although you will receive more in rent, it will cost you more to invest in the first place. Therefore your investment might not be as profitable as other areas of the UK.
The lack of supply affecting the London property market means that it will be a challenge to find property worth investing in and that prices will rise as other investors will be looking to expand their portfolios.
While the London rental market certainly appeared more attractive than it was before 2021, investors are still to be reminded that the growth we are experiencing right now is likely to hit a peak sooner rather than later.
Therefore, investing in other areas of the UK is likely to be a better investment due to lower costs of investment, combined with rising rental fees across the rest of the country.
Cities such as Manchester and Liverpool are generally seen as more attractive investment opportunities. Both have higher rental yields and are cheaper to invest in. Liverpool has seen rental yields as high as 10% in some areas of the city. The North West is also expected to see more optimistic results in the future, with an 11.7% price growth predicted by 2027.
Manchester is one of the UK’s fastest-growing property markets. Zoopla records an average property price of £252,605, under a third of London’s average price of £739,288. It also has incredibly high rental yields which average at around 7-9% according to our research.
If you would like to learn about the rental market in other areas of the UK, see our guide on the Best Places to Invest in UK Property in 2023.
Alternatively, we have several exciting investment opportunities all across the UK which are currently available. Our team here at RWInvest will be happy to answer any questions you have.