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Where is the best place to invest in UK property?

best place to invest in uk property

If you want to know where the best place to invest in UK property in 2020 is, then research is key to success.

However, investing in property while the market is undergoing a period of uncertainty – what with Brexit and the economic impact from the Covid-19 lockdown – there are still opportunities to be enjoyed.

But choosing the right location for your buy to let investment is a crucial step – and can make a huge difference on the returns you will enjoy.

There will always be setbacks to all investment vehicles but for those investors who are prepared to research and invest carefully, then the potential rewards from UK property make it an enticing opportunity.

It helps too that the UK property market offers investors one of the most lucrative opportunities in the world and there are no restrictions for those living overseas to invest in it.

Property investment in the UK

As a result, property investment in the UK should deliver high capital growth potential, along with decent rental yields.

Developer SevenCapital says that the UK’s property investment sector will continue delivering sound opportunities post-Brexit and points out that the UK has a relatively stable and robust marketplace. For many investors, particularly those from overseas, the UK will remain a ‘solid choice when it comes to investment property’.

And in recent years, the investment spotlight has moved from the popular London market, a traditional investment hotspot, to focus on cities elsewhere in the UK – particularly in the North where huge investment project in infrastructure are underway.

According to SevenCapital, their top 5 list of the best cities in the UK for property investment in 2020 are:

  • Liverpool
  • Birmingham
  • Cambridge
  • Glasgow

With an average house price of £124,600, Liverpool offers great opportunities for those investors wanting to enjoy rental yields of between 7% and 8%. Another big issue is that Liverpool and Birmingham make for sound buy to let investment choices because they still have big regeneration projects in place.

It’s worth noting too that the real estate firm Knight Frank is predicting that property prices in Birmingham will rise by 12.5% by 2022.

The best emerging property investment hotspots

Researchers from SevenCapital have also highlighted the best emerging property investment hotspots for the UK in 2020 will include Bracknell and Slough.

The firm also says that potential investors should take a closer look at Nottingham, Sheffield, Oxford, Cardiff and Leeds – which has the fastest-growing population of any city other than Manchester where it is growing at seven times the rate of London’s population.

In a report, they say: “Looking at properties priced at more than £100,000 and delivering the highest rental yields, we see that four postcodes in the Northern Powerhouse take our top spots.”

They highlight the L1 postcode in Liverpool, followed by the S1 postcode in Sheffield, M14 in Manchester and the Leeds postcode of LS6 are, according to information from research firm PropertyData, offering highest rental yields in the UK currently.

However, the firm also warns: “A high rental yield does not always tell the full story. Tenant demand is important so jumping into a high rental yield on paper area is not always the best tactic.”

Where to buy investment property

We’ve taken a closer look at the areas that are recommended for those interested in where to buy their investment property.

In recent years, the most promising investment opportunities in the UK were focused on the North West of England because:

  • Property prices were cheap
  • The population was booming
  • Young professionals are looking for quality homes in a city centre.

This spurt in investment leads to purchase prices increasing and delivering impressive capital gains for those buying a property there.

Manchester still offers great opportunities – it’s a city enjoying population growth and property prices since 2014 have risen there by 22% – there’s also a very large and thriving student population.

This North West city is one of the most exciting places in the UK to live and work, particularly for young professionals wanting to enjoy career opportunities. It’s also a city for families wanting a rental property and the skyline has been transformed by huge investment projects.

UK property investors in 2020

However, along with Manchester, investment firm RWinvest says potential UK property investors in 2020 should also look at:

  • Liverpool
  • Sheffield

The popularity of Liverpool is also underlined by other research, particularly a recent study from TotallyMoney who looked at 500,000 properties and they say that of the best 25 postcodes in the UK offering the most impressive yields, six of them are in Liverpool.

They even offer an interactive map to give potential investors a better idea of where these best property investment locations are along with data to help make a decision on whether the destination is worth investing in.

We have mentioned that research is key when looking at UK property investment and while you do not have to live close to where your properties are, it may be a good idea to focus on one town or city for this purpose.

And with Liverpool offering a generous average rental yield of up to 10%, along with very low property prices when compared to the rest of the UK, means that an investor can focus on one city for their investment vehicle and manage their properties more effectively.

The expertise and experience of property letting agents

Don’t forget that it is possible to utilise the expertise and experience of property letting agents and this may be particularly important to:

  • British expats looking to invest in UK property
  • UK property investors who want professionals to run their investment
  • Overseas investors keen to enjoy the rewards from UK property.

It’s also worth taking a closer look at the opportunities that London may present for property investors.

That’s because since 2014, property prices there have risen by 13.6%, but the market is constricted and there is an affordability issues as tenants are struggling to meet rent demands.

One of the reasons why there has been a slowdown in the capital is down to Brexit but property experts are predicting that once a deal has been concluded and the UK finally leaves the European Union, then London will be a city that will grow again.

Traditionally, London has managed to ride out the peaks and troughs of property investment and it’s a major financial world destination and investment from overseas will again flow back into the capital – which will push prices and rental demand up in affordable areas.

Essentially, the best place to invest in UK property in 2020 is still likely to be the North West of England – particularly Liverpool and Manchester – with Birmingham in the Midlands and Leeds offering scope for great returns. However, for those property investors with the money and patience, then London may once again become the premier destination for investors both in the UK and from overseas.

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