Where to invest in UK buy to let in 2021

6th January 2021

By Callum Ward

First and foremost, happy new year from all of us here at Knight Knox!

After an extremely strong end to the year in the UK property market, 2021 looks set to continue in a similar vein. In their latest house price index, Nationwide revealed that annual house price growth reached a six year high of 7.3% in December. Prices rose by 0.8% month-on-month, following on from the impressive trend seen throughout the later part of the year. In the end, house prices ended up at 5.3% above the level prevailing in March at the start of the pandemic.

This overwhelmingly positive performance from the property market is set to continue throughout the coming year with rental demand continuing to outweigh stock, but where are the best areas to invest in buy to let?

Manchester

Over the past few years, the gradual shift of investments away from the capital towards the North has been well documented, and Manchester is at the centre of it. The city is one of the most exciting places to live and work in the country, with countless young professionals flocking to the area. The city is experiencing the fastest growth outside of the capital and is leading the way in property investment.

According to Zoopla, house prices in Manchester have increased by a massive 24.68%, and JLL expect this growth to continue. In their Northern England forecast, JLL predicted that in the next five years, sales prices are set to see a 17.1% growth, whilst rental growth forecast for the next five years is 16.5%. High rental demand and a prosperous property market has enabled Manchester to stay at the forefront of property investors’ minds, and it looks set to stay there for the foreseeable future.

Liverpool

Thanks to the massive amount of regeneration in recent years paired with such a unique and welcoming culture, Liverpool has seen its popularity soar when it comes to people moving there. Over the past decade the population has grown exponentially, with the number of people living in the city centre almost doubling during the 2006-2017 period, making Liverpool one of the fastest growing cities in the country.

JLL have predicted that over the next five years, rental growth will increase by an impressive 14.8%, and sales prices will increase by 13.1%. Liverpool’s property market is constantly improving thanks to the high number of investors, renters and developers embracing the modern and progressive city, and it looks set to remain as a buy to let hotspot for many years to come.

Leeds

Leeds is one of the key cities in the ‘Northern Powerhouse’ initiative, and one of the most centralised cities in the UK. Highly regarded as an industrial powerhouse, Leeds is home to a thriving economy that is attracting talent from all over the country. With an abundance of businesses – including Burberry and Channel 4 – moving to the city offering more and more job opportunities, more young professionals than ever are relocating to Leeds, resulting in an excellent buy to let market for investors.

Over the last five years, house prices in Leeds have increased by 23.81% according to Zoopla. This impressive growth is once again expected to continue, with JLL forecasting a cumulative growth of 13.7% over the next five years. Leeds’ rental market is also expected to continue in an upward trend, with an expected 14.2% rental growth forecast over the same period – ensuring Leeds’ status as a prime buy to let hotspot.

Sheffield

Sheffield’s economic growth in recent times has been well documented, with the city becoming one of the most popular locations for both living and investing. The city boasts a GVA of £11.3bn and is currently in the midst of a 10-year strategic economic plan that is expected to increase the GVA, bring a further 6,000 new businesses and introduce 17,000 new jobs into the area by 2024. Sheffield is a city on the up, and the buy to let market in the area is no different.

As mentioned, Sheffield is one of the most up and coming places in the country, and the South Yorkshire city has seen a 24.17% increase in house prices over the last five years. Rental yields in Sheffield are extremely strong when compared to the national average of 3.53% (according to SevenCapital). In the S1 region, the average yield stands at 6.5%, closely followed by 6.2% in S3 and 4.7% in S5. House prices are also expected to increase by 11.41% according to SevenCapital, making Sheffield an extremely profitable investment location for those looking to invest in buy to let.

What does this mean?

Well, the buy to let market seems to continue to point towards Northern cities as prime locations for buy to let property. The area benefits from higher average rental yields than the capital, and paired with lower prices it seems like the obvious choice when investing in buy to let.

We have a plethora of properties available for investment all over the North of England, with many located in the aforementioned cities. Have a browse through our current available investment opportunities here!

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Where to invest in UK buy to let in 2021

06 January 2021

First and foremost, happy new year from all of us here at Knight Knox!

After an extremely strong end to the year in the UK property market, 2021 looks set to continue in a similar vein. In their latest house price index, Nationwide revealed that annual house price growth reached a six year high of 7.3% in December. Prices rose by 0.8% month-on-month, following on from the impressive trend seen throughout the later part of the year. In the end, house prices ended up at 5.3% above the level prevailing in March at the start of the pandemic.

This overwhelmingly positive performance from the property market is set to continue throughout the coming year with rental demand continuing to outweigh stock, but where are the best areas to invest in buy to let?

Manchester

Over the past few years, the gradual shift of investments away from the capital towards the North has been well documented, and Manchester is at the centre of it. The city is one of the most exciting places to live and work in the country, with countless young professionals flocking to the area. The city is experiencing the fastest growth outside of the capital and is leading the way in property investment.

According to Zoopla, house prices in Manchester have increased by a massive 24.68%, and JLL expect this growth to continue. In their Northern England forecast, JLL predicted that in the next five years, sales prices are set to see a 17.1% growth, whilst rental growth forecast for the next five years is 16.5%. High rental demand and a prosperous property market has enabled Manchester to stay at the forefront of property investors’ minds, and it looks set to stay there for the foreseeable future.

Liverpool

Thanks to the massive amount of regeneration in recent years paired with such a unique and welcoming culture, Liverpool has seen its popularity soar when it comes to people moving there. Over the past decade the population has grown exponentially, with the number of people living in the city centre almost doubling during the 2006-2017 period, making Liverpool one of the fastest growing cities in the country.

JLL have predicted that over the next five years, rental growth will increase by an impressive 14.8%, and sales prices will increase by 13.1%. Liverpool’s property market is constantly improving thanks to the high number of investors, renters and developers embracing the modern and progressive city, and it looks set to remain as a buy to let hotspot for many years to come.

Leeds

Leeds is one of the key cities in the ‘Northern Powerhouse’ initiative, and one of the most centralised cities in the UK. Highly regarded as an industrial powerhouse, Leeds is home to a thriving economy that is attracting talent from all over the country. With an abundance of businesses – including Burberry and Channel 4 – moving to the city offering more and more job opportunities, more young professionals than ever are relocating to Leeds, resulting in an excellent buy to let market for investors.

Over the last five years, house prices in Leeds have increased by 23.81% according to Zoopla. This impressive growth is once again expected to continue, with JLL forecasting a cumulative growth of 13.7% over the next five years. Leeds’ rental market is also expected to continue in an upward trend, with an expected 14.2% rental growth forecast over the same period – ensuring Leeds’ status as a prime buy to let hotspot.

Sheffield

Sheffield’s economic growth in recent times has been well documented, with the city becoming one of the most popular locations for both living and investing. The city boasts a GVA of £11.3bn and is currently in the midst of a 10-year strategic economic plan that is expected to increase the GVA, bring a further 6,000 new businesses and introduce 17,000 new jobs into the area by 2024. Sheffield is a city on the up, and the buy to let market in the area is no different.

As mentioned, Sheffield is one of the most up and coming places in the country, and the South Yorkshire city has seen a 24.17% increase in house prices over the last five years. Rental yields in Sheffield are extremely strong when compared to the national average of 3.53% (according to SevenCapital). In the S1 region, the average yield stands at 6.5%, closely followed by 6.2% in S3 and 4.7% in S5. House prices are also expected to increase by 11.41% according to SevenCapital, making Sheffield an extremely profitable investment location for those looking to invest in buy to let.

What does this mean?

Well, the buy to let market seems to continue to point towards Northern cities as prime locations for buy to let property. The area benefits from higher average rental yields than the capital, and paired with lower prices it seems like the obvious choice when investing in buy to let.

We have a plethora of properties available for investment all over the North of England, with many located in the aforementioned cities. Have a browse through our current available investment opportunities here!

Callum Ward

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