Nottingham Property Investment

The bustling small city of Nottingham has had quite an astounding growth in recent years.

Voted in the top 10 best places to live by the Sunday Times in 2020 and featuring a thriving leisure and business scene, there’s a lot to love about this East Midlands city.

The city has been described as “fun, funky, and affordable” by the Sunday Times, with a charm to rival Manchester’s Northern Quarter.

This is a far cry from a city that was built on a rigid industrial backbone.

Previously, the East Midlands city was regarded across the world as a pioneer in the lace-making, bicycle-building, and drugs industries.

Now, though, Nottingham has burst into the modern era, with its major industries now including a bustling business and financial sector, clean technology, digital and life sciences, and more.

Nottingham is a central cog in the UK logistics network, thanks to its ideal location. It has nearby access to the M1 and A1, placing around 77% of the UK’s population within an hour’s drive.

If that wasn’t enough, the city also has the reputation of a UNESCO City of Literature. In addition, it is steeped in history thanks to the stunning Nottingham Castle and the legend of Robin Hood to explore.

Not only does the city boast a thriving shopping hub, stunning art scene, and one of the best public transport networks in the UK, but Nottingham’s buy-to-let market is quickly becoming one of the best around.

With incredibly affordable prices, impressive rental yields, and a strong demand from young tenants, Nottingham property investment needs to be at the forefront of investors’ minds in 2024.

While we will discuss what it’s like living in the city later in this guide, the next few sections will focus specifically on the impressive rise of the Nottingham buy-to-let market.

In any city, capital growth is one of the most vital statistics for investors.

Capital growth is the growth in the price of a property over time. This is crucial for investors as it allows them to sell a property further down the line for a significant profit.

Cities like Liverpool and Manchester have dominated recent decades for capital growth potential, with Manchester seeing property prices increase by nearly 280% since 2003 – one of the highest growth rates out of every major UK city.

While Nottingham buy-to-let property hasn’t seen such significant growth, the levels shown have been impressive.

Property Price Growth 2022 to 2023/24

The period between 2020 and 2021 can only be described as a whirlwind.

With three national lockdowns caused by the covid-19 pandemic, the Bank of England Base Rate being cut to its lowest ever level, and a shakeup in the property market from the stamp duty tax holiday, life has never been so uncertain.

Despite these economic pressures, though, the property market, in general, has seen considerable growth, with the average UK property surpassing the £250,000 mark for the first time ever.

Since then, property has been selling at a record pace, with demand reaching new highs in 2023.  However, the stock of properties is at some of the lowest proportions ever recorded, according to Rightmove and Zoopla.

In fact, the average number of days to sell a property has reached its lowest ever level, while the number of houses selling within just one week has now reached a record-breaking high.

All these factors have been mirrored in the Nottingham buy-to-let market.

Looking at the price growth graph from 2022 to 2023, there has been a consistent rise in property prices.

At the start of 2022, property prices in Nottingham were valued at just £171,214. Fast-forward to the present, and property prices are now  13.74% higher.

This is incredible growth and is higher than the likes of Bristol and London.

Property Price Growth 2018 to 2023/24

Looking back further still, it is important to consider long-term growth when evaluating the performance of a property market.

After all, a lot can change in five years, and as an investor, you will want to feel comfortable knowing your investment location has shown signs of stability over the years.

Luckily, Nottingham property investment has shown strong growth over this time period.

Between January 2018 to January 2023, there was a continuous and consistent level of growth seen, before seeing a huge jump come 2021/22.

Back in 2018, property prices in the area were valued at just £138,128. Jump forward 12 months to 2017, and prices were already £5,000 more expensive.

This growth continued into 2020 and 2021, where prices were 5.06% higher than a year prior.

Overall, between 2018 and the latest available data from the Land Registry, property prices have increased from £138,128 to £194,736, which is a percentage increase of 40.98%

This is one of the highest growth rates in property over that period out of every major UK city, including Newcastle, Bristol, Sheffield, Birmingham, London, and more.

These growth levels have even spread across the last 20 years, too.

Since 2003, property prices in Nottingham have increased by a huge 135.88%.

It’s clear that the city has huge capital growth potential and is a good choice for investors looking to maximise their house prices in the coming years.

After already seeing huge growth in price over the last few years, it’s time to look ahead to the future for the latest Nottingham property price predictions.

According to Savills’ latest predictions, the city is set to have incredible growth over the next five years.

Over 2022, the East Midlands is expected to see property prices rise by 4%. If property price growth in 2022 is anything like that of 2021, it’s likely this percentage will be even higher, with 2021 seeing a 6.2% growth between January and September alone.

If the property growth in the city continues on this trajectory, it could be a record-breaking year for this East Midlands location.

After 2022, prices will rise by 3.5% in 2023, with an additional 3% growth in 2024.

Soon after, in 2025, prices will again rise by an additional 2.5%, with a final 2% growth in 2026.

Overall, Savills has found that the East Midlands will see property prices rise by 15.9% by 2026.

This is the third highest growth rate in the country and compares well to other UK regions.

The East Midlands outperforms all southern locations and offers capital growth rates more than twice as high as London, which is set to see 5.6% growth by 2026.

The only locations the East Midlands doesn’t outperform are the North East, Wales, Yorkshire and The Humber, and the North West.

The latter two locations have staggering growth potential in the coming years, with the likes of Liverpool and Manchester likely to exceed an 18.8% growth rate by 2026.

Our final step in looking at Nottingham property investment is exploring how the city compares to other UK locations.

After all, if you’re looking for an investment property, you will want to know you’re investing in the best possible location.

With that in mind, let’s compare Nottingham to locations in the North West, Birmingham, and London.

Nottingham vs the North West

The cities of Liverpool and Manchester have long been considered the ultimate property investment destination.

Property prices in both cities have exploded in recent years, with Liverpool offering the highest returns possible, according to TotallyMoney, with 10% yields in the L1 postcode.

Meanwhile, the Manchester market has experienced some of the highest capital growth over the last 20 years, with a recorded property price growth of nearly 350% since 2001.

Factoring in some of the highest rental demand in the country in both cities, and you have a recipe for buy to let success.

So, what better way to test the Nottingham market than comparing it to the best UK property investment has to offer?

While Nottingham has a lot of impressive figures in many categories, the city is outperformed in long-term growth by both Liverpool and Manchester, which has predicted growth of 18.8% by 2026; the city has done incredibly well.

Rental yields are attractive in Nottingham at 6.65% and are even higher than Liverpool at 4.97%, although property sees less demand in Nottingham than Liverpool.

Moreover, the five-year price growth (between 2016 and 2021) of Nottingham is the highest out of every major UK city, with a record 41% increase since 2016.

Overall, while Liverpool and Manchester still show more investment potential, Nottingham is quickly rising as a strong buy to let property contender.

If you want to learn more about the ultimate property destinations, be sure to read our guides to Liverpool property investment and Manchester property investment.

Nottingham vs Birmingham

The East Midlands vs the West Midlands. The clash of the property titans.

While these two areas have yet to become the top property destination like the North West, both have seen miraculous growth over the years.

With Birmingham acting as the UK’s second city and contributing billions to the UK economy, this match-up may seem like a slight mismatch.

However, the potential of buy-to-let property in both regions has become incredibly high.

Looking at recent figures, Nottingham is outperforming the Birmingham market in every aspect.

Not only is the city generally more affordable, with average Birmingham property prices around £36,679 higher, but it also generates higher returns and stronger past capital growth rates.

Birmingham’s current average rental yield stands at 5.67%, while past capital growth of 4.36% between January and September 2021 is lower than Nottingham’s 6.2% during the same period.

Of course, Birmingham will no doubt generate far higher rental demand than Nottingham, but the statistics are incredibly impressive.

With both cities set to rise by a further 15.9% price growth by 2026, it seems a good idea to start considering investing in the UK midlands over the coming years.

Nottingham vs London

As already established, Nottingham has built up the reputation of punching well above its weight when it comes to the UK property market, and London is no exception.

The UK capital of London accounts for over one-quarter of the UK’s total GDP and attracts more foreign investment than every other UK city combined.

Yet despite this huge economic backbone, the Nottingham property market has vastly outperformed London over the last five years.

Not only are Nottingham prices drastically below that of London, but yields and growth are far higher than in the capital, which has seen massive drops in property prices over the last five years. Between January and September 2021, London property prices grew by only 1.8%.

Perhaps even more surprising, this trend is set to continue in the future, with Nottingham expected to see a 15.9% growth by 2026, while London is only set to see only a 5.6% rise.

Overall, Nottingham is vastly outperforming many top UK locations and is certainly one to watch for the future if you’re looking for Nottingham investment property for sale.