There are many aspects to take into account whenever we discuss the top locations in the United Kingdom at which to make a real estate purchase or investment in 2023.
Before we get started on this, it is essential to have a crystal clear understanding of what factors indicate that there is significant potential for a profitable investment in real estate. Some of these factors are self-explanatory. We focus on the following key metrics:
- Costs Of Property
- Population
- BTL Opportunities
- Earnings From Rent
- Tenant Demographics
- Future Work Scope
- Regeneration
This enables us to construct a comprehensive picture of a location’s potential performance in the buy-to-let market, while at the same time drawing attention to developing cities and towns that are not necessarily conventional investment options.
Buyers will benefit greatly from having a solid understanding of these metrics to figure out where they should consider looking for property investment in the UK.
In the past few years, house prices in the United Kingdom have increased to record highs, bringing to light the influence that investments in real estate in the United Kingdom can have on individuals looking to make financial gains.
While you read further, you can also check out the top things to consider when buying a home in London.
Birmingham
- Price of Properties on Average: £239,016
- Average Rental Yield: 6.56%
- Pricing Increase during the Past Five Years: 34.01%
In spite of the fact that citywide revitalization efforts are currently underway, Birmingham will still be one of the best locations in which to make an investment in 2023.
The Big City Plan is a citywide transformation project that will take 20 years and has already passed the halfway point. Huge improvements have been made to the city centre, several suburbs, as well as transport and infrastructure.
The low cost of living in Birmingham is one of the city’s most compelling selling points. According to research conducted by Knight Frank, the ratio of the average income to the average property price is significantly higher in Birmingham compared to the rest of the UK.
The city is attracting and retaining a large number of skilled workers who have the income to spend as a result of its thriving tech sector and financial sector. The tech sector is growing at the fastest rate in the country.
Additionally, Birmingham continues to be the most popular location for people leaving London to settle after moving there. Furthermore, Birmingham has a sizable potential rental market due to the fact that forty percent of the population is under the age of twenty-five and that the student retention rate is forty-nine percent.
According to Rightmove, the cost of renting a property has gone up by 17.6% in just the past year despite the fact that the majority of the market is comprised of apartments with either one or two bedrooms. This is true at least in the location that is becoming more popular in the city centre.
In addition to this, Birmingham has also benefited tremendously from being the host of the Commonwealth Games in 2022 and will keep doing so for many years to come, particularly with regard to the real estate market.
The Games stimulated significant investment in the redevelopment of Birmingham, with over £25 million worth of city-centre projects with the goal of revitalising public areas and adding more places for pedestrians to congregate.
An additional £778 million was pumped into the delivery of world-class sporting venues. Both of these goals were accomplished as a direct result of the Games.
A report on the value of the Commonwealth Games, which we based in part on an examination of data from the Land Registry, the cities of Manchester and Glasgow saw a 140% and 27% increase in property prices in the five years following their hosting of the Commonwealth Games, respectively.
These cities also saw substantial inward investment, which boosted their economies by at least £1 billion.
In the end, new transportation connections are being built upon some of the UK’s most solid foundations of connectedness.
As progress is being made on HS2, a generational construction that will revolutionise Birmingham and bring speedier commutes to the city, the Midlands Metro extension continues to provide convenient access to emerging West Midlands locations.
SevenCapital predicts that Birmingham will be the best area to invest in UK property in 2023 because of all the planned improvements to the city.
Leeds
- Price of Properties on Average: £247,824
- Average Rental Yield: 7.20%
- Pricing Increase during the Past Five Years: 39.56%
The city of Leeds, another Northern powerhouse, has emerged as a prime location for real estate Investors in search of returns from long-term rentals, earning it a firm spot on our list of the best places to buy property in the United Kingdom in 2023.
Leeds, with its population of 812,000, has a booming rental industry. Leeds is the sixth best place for rental growth in the UK, according to Zoopla’s newest research on the rental market for Q3 2022, with a rise in average rental income of 11.4% from Q4 2020. This is great news for investors seeking stable tenant demand.
Although Leeds’ capital growth has been small in comparison to the other cities regarding this list, rental demand has been picking up speed. Savills forecasts that between now and 2025, Yorkshire will rise by 28% due to the aforementioned demand and the delivery of several build-to-rent initiatives.
According to Irwin Mitchell’s UK PowerHouse research, Leeds will have over 19,000 additional jobs by 2023 compared to 2021, which will attract even more people into the city overall..
More than £3.9 billion has been invested in regeneration projects over the past decade, and another £7.3 billion is expected over the next few years, all of which will have a positive effect on home values and rental rates.
SevenCapital has included Leeds as one of the top redevelopment targets for 2023 because of this.
The city of Leeds continues to outpace several European counterparts and become one of the fastest expanding in the UK economically. Since 2018, this has caused roughly 10% of London’s population to leave the city annually due to the lack of prospects there.
Bracknell
- Price of Properties on Average: £411,997
- Pricing Increase during the Past Five Years: 19.79%
London’s housing market is growing at a slower rate than the rest of the UK, thus some significant towns in the South East have risen to prominence because they are more affordable while maintaining good transportation links to the city.
There are a few towns like Bracknell. Bracknell is a popular alternative to London for homebuyers and those looking for viable property investments due to its proximity to the city and the fact that it is home to a number of globally prominent recognised corporations including Dell, Microsoft, and 3M.
The UK House Price Index shows that the Bracknell real estate market has appreciated by 249% in the last 20 years, and by 19.79% in only the last five. In September of 2022, home prices were still 25% below the average London home.
Savills expects house prices to grow by an average of 19.1 percent over the next five years as a result of a strategy for revitalization costing 770 million pounds.
Bracknell provides a potential for investors seeking long-term growth and stable profits by catering to the needs of the youthful, professional population that commutes to London.
Manchester
- Price of Properties on Average: £238,861
- Average Rental Yield: 5.71%
- Pricing Increase during the Past Five Years: 38.29%
Maintaining its reputation as the northern powerhouse it was long touted to be, Manchester is now one of the most interesting places to invest in real estate.
Manchester is among the top three areas in the North for the price increase, with some of the strongest gains in value over the past five years included in this list, including a large rise between 2017 and 2018. According to Urban bubble, rental income has risen by 19.5% in the past year.
According to JLL’s latest home price projection, property values in the North West are predicted to increase by 17.4 percent over the next four years, continuing a recent upward trend.
Both the city’s economy and population have grown tremendously over the past few years, which is partly responsible for this. When compared to London, Manchester is still a viable option for renters.
One of the most youthful populations in the UK can be found in this city, with 38.7 percent of residents falling in that age range, making it an attractive rental market thanks to the abundance of job prospects available in multinational corporations.
Manchester has benefited greatly from the Great North Rail project, which has reduced travel times to major locations of the North and increased capacity to accommodate an additional 40 thousand people daily.
Newcastle
- Price of Properties on Average: £198,347
- Average Rental Yield: 7.70%
- Pricing Increase during the Past Five Years: 25.53%
Newcastle, the most populated city in the North East and the eighth-largest in the UK, is a top pick for investors due to its low cost of living and high rental returns.
Newcastle’s average property price is still 33.6% below the UK average, presenting a tremendous opportunity for those who invest in real estate to make big returns, with postcodes like NE1 and NE6 offering high yields of about 8% to 9.2% near the very centre of the city, where the typical return currently stands at 7.7%.
Yet, Newcastle is a major hub for higher education and boasts a top graduate retention rate.
This area is also hailed as an excellent spot to launch a company since its start-up rate is among the highest in the country. This is likely to raise the need on the part of young working professionals, driving up rental prices and, ultimately, yields.
The city’s thriving education and technology sectors, in addition to its many corporate offices, provide stable employment in a range of fields, contributing to the city’s growing demand for skilled workers and bolstering its burgeoning entrepreneurial spirit.
