What Are the Best Places in the UK to Invest in Property?

Another of the most up and coming areas in the UK for buy to let, Sheffield is a fantastic city to consider if you want to invest in low-priced property. With an average house price of £206,227 according to Zoopla, Sheffield comes just after Liverpool on the affordability scale.

As with other average house price rates, the price of properties in Sheffield gets lower depending on the property type you look at. For instance, the average cost of a one-bedroom flat in Sheffield stands at just £104,255 while the average for a two-bedroom house is £146,165. Again, the average costs of property in Sheffield highlight how the North of the country boasts some of the best places to buy in the UK.

The closer you get to the city centre of Sheffield, the cheaper property prices become. In Sheffield city centre, the average property price is just £135,570, while properties in the East of the city are also highly affordable. In the S2 postcode, for example, you can buy a one-bedroom flat for only £71,944. Investors looking into Sheffield property investment should avoid more suburban areas such as those in the S11 postcode, where the average house price is currently £329,365.

The vibrant and historic city of Newcastle is another of the best areas for buy to let in the UK, and a great choice if you want to know where to invest in property without breaking your budget. Zoopla area guide statistics for Newcastle reveal that the city’s average property price stands at £223,421 – just over the average in Liverpool and Sheffield.

Newcastle is rising in reputation as a top property investment city due to its popularity with a young population of tenants. Both students and young professionals are seeking properties in Newcastle, which is why the area has attracted more investment over recent years. One downside, however, is that property prices in Newcastle city centre aren’t as low as those in the city centre of other UK cities, where the average price for a two-bedroom flat is £185,609.

Property investors who want to know where to invest in property in Newcastle for lower prices should look to postcodes such as NE4 in the West of the city. Here, one-bedroom flats have an average of just £87,750. It’s important to keep in mind, however, that you may be likely to benefit from higher levels of rental demand in the city centre, despite the higher prices.

Considered one of the best places to invest in property in the UK for 2019 and 2020, Manchester remains a firm favourite for buy to let investment in 2021. One of the reasons that Manchester stands out for its investment potential is the affordability of property prices in the city. While Manchester’s average of £242,723 is a little higher than the average property price in the city’s Northern neighbour, Liverpool, the city still offers great prices for such a prominent UK hotspot. This affordability has meant that Manchester is not only a fantastic place to invest, but also a fantastic place to live as one of the best places to retire.

In Manchester city centre, the average price for a one-bedroom flat comes to around £177,328 according to Zoopla. However, with the city centre generating such high and ongoing levels of rental demand from desirable tenant groups, along with offering a range of fantastic developments, paying a slightly higher amount than you would in other Northern cities is justifiable. The Local Blackfriars development located in the city centre is a great example of this, priced from £180,000 but offering such a striking blend of grade listed architecture and modern designs.

In Salford, another of Manchester’s top areas for investments, the average price for a one-bedroom flat is £158,097, highlighting better affordability outside of the city centre. Areas in Manchester where prices are typically lower are those in more suburban areas. As with any property investment, however, you need to weigh up the benefits of low property prices with the risk of not getting the most out of your investment by attracting less demand.

There’s no doubt that Glasgow is one of the most affordable cities in the UK when it comes to property prices. Currently coming second to Liverpool as the cheapest place to buy property in the UK in 2020 and 2021, average Glasgow property prices stood at £193,399 by October 2020.

When focusing in on the different property types available for investment in Glasgow, a one-bedroom flat is the most affordable purchase with an average price of £101,791 according to Zoopla. In Glasgow city centre, where demand for apartments is likely to be high, the average price stands slightly higher at £128,515.

While property prices are certainly low in Glasgow, it’s also important to consider the fact that house price growth may not be strongest in this city compared to in other areas like Liverpool and Manchester. Liverpool is the most affordable UK city with an average property price of £182,913, while also boasting the highest predicted capital growth of 27.3% in the North West region. While Scotland’s expected growth isn’t far behind, standing at 25.4%, Liverpool may be a more stable choice for investors looking for not only the cheapest place to buy property in the UK but the fastest growing, too.

When looking for the best place to invest, property in the UK’s second city is one to watch for rental yields as well as affordability and capital growth. The average rental yield for Manchester is just below that of Liverpool at 5.16%. In research by Property Data, it was revealed that certain Manchester postcodes are capable of generating yields that exceed this overall average for the city. The M14 postcode, for example, has an average yield of 8.4%, while the M50 postcode which is home to Salford Quays and MediaCityUK offers rental yields of 6.8% on average. This is highlighted with the Salford Quays development, Bridgewater Wharf, which comes with 6% projected net yields.

Manchester is much like Liverpool in the fact that the city generates such a high demand for rental properties from both students and young professionals taking advantage of the fantastic business opportunities. Overall, this Northern city is certainly a prime contender in the hunt for the best place in the UK to invest in property.

With average rental yields of 4.99% Sheffield offers a lot of potential for investors wondering where to invest in property. Sheffield has been gaining attention as one of the best places to invest in property in the UK in 2018, 2019 and 2020, and this is partly thanks to the growing rental yields in the city. Sheffield’s S1 postcode made the most recent Totally Money buy to let yields list due to its 7.83% yield. Covering parts of the city centre and inner-city Sheffield districts, S2 is a popular spot for renters, attracting demand from plenty of young professional tenants and boosting average rental costs for the area.

While Sheffield does have some high yields, however, there are certain areas that should be avoided. The S7 postcode in Sheffield made the Totally Money list of the 10 worst buy to let postcodes in the UK due to yields of just 2.19%. This highlights the importance of doing research when looking into the best places in UK to buy property, as even high-performing areas can have some negative attributes.

With one of the lowest average yields within our top picks for UK property investment areas, you might not automatically consider Edinburgh as a good choice for the best places in the UK to invest in property for rental returns. While the overall average rental yield of 4.05% for the Scottish capital may not be as impressive as those in other locations, the potential is still there when you explore certain parts of the city.

In Edinburgh city centre, Zoopla states the average purchase price of a one-bedroom flat as £193,017, while the average rent costs £821 pcm. This would mean that average yields for Edinburgh city centre come to around 5.10%. Evidence also suggests that rental costs in Edinburgh are rising rapidly, with a reported growth of 46.3% between 2010 and 2019. This could mean that property investments in Edinburgh will become more and more lucrative as time goes by, especially with the city’s popularity as a top student city. If you’re prepared to research certain locations and spend a little more than you typically would in more affordable cities like Liverpool, Edinburgh can make one of the best places to invest in property in the UK in 2020.

Glasgow is another city that is often viewed as the best place to buy a property to let in the UK due to the rental yields available. Offering an average yield of 5.18% according to Zoopla’s average property price and rental cost data, Glasgow is certainly the best buy to let city in Scotland, with Edinburgh yields averaging out at just 4.05%.

Arguably the best postcode area in Glasgow to invest in is the G52 postcode, which made third place on the Totally Money buy to let list with an 8.71% yield. The G51 Glasgow postcode is also highly regarded due to yields of 7.32%. However, like Sheffield, certain parts of Glasgow are not as lucrative when it comes to finding the best locations for buy to let. A total of three postcodes made Totally Money’s list of the worst buy to let areas in Scotland, with yields as low as 3.66% in the G77 postcode area.

With an average rental yield of 5.47% based on Zoopla data, Newcastle is definitely one to consider if you’re looking to find the best places to invest in rental property for 2020. While Newcastle’s average rental yield appears to be high, however, none of the city’s postcode areas appear in the recent Totally Money list for property investment in the UK. This makes it more difficult to know which parts of the city investors should focus on if they’re looking to make a Newcastle investment.

The nearest town to Newcastle which appears in the Totally Money list is Gateshead, with 7.27% yields in the NE8 postcode. Just a 9-minute drive from Newcastle, Gateshead may be the smarter choice for investors who are set on a Newcastle investment but still interested in seeking the highest yields possible.

Knowing where to invest is an essential factor in securing a profitable property investment, but there are also some other things you should think about. If you want to know how to make your property investment venture as lucrative as possible, you should keep the following tips in mind.

• When embarking on a UK investment, be sure to research your options for investing in property. While buy to let is a popular strategy, and the one we reference most throughout this guide to the best places to invest in property, there’s also buy to sell. Buy to sell works a little differently to buy to let due to the fact buy to sell investors don’t rent their property out to tenants for a profit. With a buy to sell investment, the investor will purchase a property and then benefit from the money they make from it’s sale. This means that capital growth and added property value are crucial for this type of investor. While buy to let strategies are overall more profitable as the investor benefits from both rental income as well as income from the sale of the property, many people prefer buy to sell strategies, so make sure you research the different property investment opportunities out there to find one that you feel will be the most lucrative for you.

• Make sure you do further research on the best places to invest in the UK. This guide to the best areas to invest in property is definitely a good place to start, but once you know the basics, you should follow up with some research of your own. That means comparing investment opportunities in different cities, looking at house price growth statistics for different areas, and finding out about the population of each city to get a better idea of rental demand. By researching the best areas to invest, you can ensure that your investment in UK property is a lucrative one.

• Investing in off-plan properties is an important tip for investors who want to find the most lucrative property investment opportunities. One of the best tips for investors is to find properties that have below-market value prices, and since off-plan properties tend to be offered at discounted rates, they make a great choice. By paying lower amounts for your investment property, you’re able to experience heightened capital growth as well as a stronger rental yield. Off-plan properties are also often offered with incentive deals such as assured rental returns.

The Covid-19 pandemic of 2020 has had an impact on the UK property market, although not as negative as many had initially predicted. Following the nationwide UK lockdown in March, Zoopla predicted that Covid-19 would ‘paralyse’ the UK property market, with property price drops well into summer. By September 2020, property prices had reportedly reached a record high, having risen at their fastest rate since 2016. Despite some negative property market performance during the Spring, UK property investment remained strong, with many investors looking to take advantage of enticing deals such as discounted property prices and the stamp duty holiday which was announced in July. So far, it looks like the UK market has stayed resilient in the face of uncertainty brought by the Covid-19 pandemic, with 2020 and 2021 remaining a great time to invest money in UK property.

While we know that property prices in a number of UK cities are currently performing highly, with some fantastic rental yields and property growth areas in the UK, the issue of property prices after Brexit is one that still leaves many investors feeling uncertain. If you’re wondering ‘where is the best place to invest in property following Brexit?’ and whether the best places to invest in property in the UK for 2019 will remain promising after our exit from the EU, the following information should help.

After leaving the EU officially on the 31st of January, the UK was in a transition period for the majority of 2020. On the 24th December, a Brexit deal had finally been agreed on with the EU, which was brought a new level of certainty to the UK property market. The main reason that Brexit has affected the UK property market over recent years has been due to uncertainty brought on by the vote. Following Boris Johnson’s election victory in December 2019, however, things have massively improved in what’s been named the ‘Boris Bounce’. Because Johnson was elected with such a high majority, the UK regained a lot of confidence in both the property market and economy. Immediately following the general election result, the GBP reached the highest rate it had been at since May 2018, investment sectors saw a growth in share prices, and property prices jumped by 1.8% in one month.

Due to this boost in market confidence, experts are predicting that both property prices and rental values are set to see a rise over the coming years, even with some remaining uncertainty around the outcome of Brexit. Specifically, the best places to buy in UK areas are expected to continue to be those in the North West, with JLL predicting a 3% growth in rental costs for Liverpool and Manchester.

The best areas for rental properties in the UK are those based in the North West region, due to cities like Liverpool offering the highest yields in the country. But where are the best places to buy an investment property when it comes to future rental returns? A recent report from JLL reveals that the highest rental price growth is expected within one of the most prominent property hotspots in the UK – Manchester. Manchester is expected to experience a five year growth of 16.5% in the cost of rent, which will inevitably lead to stronger rental returns. Liverpool is also set to see rental prices grow over the next five years, with an increase of 14.8%. This shows that if rental returns are your main motive for investing in UK buy to let, buying property up North remains a fantastic option over the coming years.

By analysing the most popular buy to let cities, it’s evident that there’s a clear divide between the North and the South when it comes to property investment. Five of the eight cities in this list of the best place to invest in property in the UK are located in the North. The remaining cities are based in the Midlands and Scotland, with no Southern cities offering signs of a high-performing property market in terms of yields, affordability and growth. So why is it that the best areas for buy to let tend to be up North?

Let’s start by looking at property prices in three of the top cities in the South. In Brighton, average property prices according to Zoopla stand at £478,106. In Bristol, the average is a little lower at £338,111, and in London, the average property price is a whopping £906,907. Because of these high purchase prices, it’s difficult to generate high rental yields.

In Totally Money’s buy to let guide, London’s WC1X postcode is home to the number one worst rental yield at 2.28%. In this postcode, average rental costs for a one-bedroom flat are around £1,880 per month according to Zoopla data. Pair this with the average purchase price of £634,776 for the same property, and you end up with a yield of around 3.55%. While this isn’t as low a figure as some, it begs the question as to why you would spend so much on a London investment when you could spend a lower amount and benefit from higher yields in the North.

Capital growth is also typically low in the South, with London property values having grown by only 6.45% over the last five years compared to 15.76% in Manchester. Savills also predicts that house prices in London will have increased by just 12.7% by 2024. In the South East and South West, predictions for capital growth are a little stronger, with an increase of up to 17.3% expected. If you’re adamant on not buying property up North for your investment, these regions are probably the best places to buy property in the South when it comes to capital gains.

Slough is a large town in Berkshire, located in the South East of England and just a short train ride to London. The area’s proximity to the English capital makes Slough property investment a great spot for investors wondering where to buy property in or near London without paying the capital’s huge prices.

Statistics show that around 46% of properties in Slough are let to renters from London, confirming the area’s status as a commuter town. The area is only continuing to develop thanks to ongoing regeneration projects such as ‘the Curve’, a recently developed cultural centre. While no exact rental yield average is clear for Slough, it’s estimated that rental yields could stand at around 5%, which is higher than the yields on offer in many parts of London but still lower than rental yields available elsewhere.

Cleveland is another area that’s being recognised for its buy to let potential. Cleveland is a former county which comprises parts of Yorkshire and Durham. Known for its rural scenery, the area’s name was said to have derived from the phrase ‘Cliff Land’.

While more rural areas like this may not spring to mind when it comes to buy to let, Cleveland is another UK spot that made the Totally Money rental yield list. With two postcodes listed, TS1 and TS3, Cleveland is able to generate yields of up to 8.50%. Close to Teeside University, both postcodes could be great spots for a student property investment, while Teeside boasts a fast-growing business scene which could help boost rental demand from young professionals.

Kilmarnock is yet another town which has attracted attention thanks to Totally Money’s list of the top 25 rental yield postcodes. Located in East Ayrshire, Kilmarnock is the 15th most populated place in Scotland. Alongside boasting a high population of around 46,350 people, Kilmarnock offers rental yields of 8.31% in the KA1 postcode. Like Falkirk, Kilmarnock is well connected to Glasgow. Therefore, the area could make a good place to invest in order to cater to a more diverse rental market of both young professionals and families/retirees.

While Newcastle has made our guide to the best places to invest in property in the UK, Sunderland is another Tyne and Wear city that deserves a mention in regards to its buy to let potential. Two of Sunderland’s postcodes, SR8 and SR5, have made the Totally Money yield list, offering rental yields of up to 7.32%. This makes Sunderland even more of an attractive prospect than Newcastle as of late. However, there are some areas which Newcastle has the upper hand, such as a larger student population and more famous nightlife scene. Even still, with such high yields, Sunderland should be one to watch for UK investors keen to expand their buy to let portfolio.