Derby Property Market in 2021
The whirlwind of 2020 impacted every property market across the UK in some way, shape, or form. While some of the ripple effects of Covid-19 have challenged certain markets, the subsequent shifts in tenant demand that we have seen have only fuelled the East Midlands property market.
In the search for more space and increased affordability, tenants have been looking to core cities across the East Midlands, such as Derby and Nottingham, which has led to a 60% increase in sales over the past 12 months, 17% of which were from London leavers.
With the East Midlands offering high standards of city living but at half the price, it’s no surprise that the region is thriving. Derby has long been a leading city within the East Midlands, and with this growing demand it has seen Derby property forecasts report annual growth of 3.5% while remaining one of the most affordable hotspots in the Midlands.
Despite boasting consistent growth – in both the economy and the property market – the future of the East Midlands is arguably more impressive for investors. With the flurry of demand that the region is experiencing, future forecasts are expecting house prices in Derby to see growth of up to 24% by 2025.
Derby Supply and Demand
Striking the right combination of supply and demand is vital for maximising the returns of a Buy-to-Let property, which is why finding a location with an undersupply of property and growing demand can result in a potentially lucrative investment.
The supply of property across Derby has been lagging behind demand for years, with the city’s future growth set to only fuel this further. Derby’s population is currently surpassing 255,000, yet the city only has 17,800 rental properties in total, highlighting the potential of investment opportunities in the area.
Properties to rent in Derby have always been – and always will be – a staple within the market, due to the city’s young population. Almost 50% of Derby’s population is under 35, and with a strong student population of over 30,000, the city has a strong foundation of residents within ‘generation rent’, looking for properties to rent in Derby.
The demand for property is already far surpassing the supply across Derby, but with the population set to reach 312,000 by 2037, this undersupply could continue to escalate. Both house prices in Derby and average rents will likely reflect this growth in the coming years, driving the positive Derby property forecast and cementing the city as a prime investment opportunity.
Download the ‘Derby Investment Guide’ Today
Discover why Derby property investment is on the rise with our Derby Property Investment Guide, as this East Midlands city builds itself as a new investment hotspot in 2021. Inside you’ll find:
Why Invest in Derby? – What makes this East Midlands city a top investment destination?
Derby Market Performance – How is Derby’s current performance driving future growth?
Future Opportunity for Derby? – What does the future hold for Derby and how is it forecasting investment potential?
Derby Past Performance
House prices in Derby have been on an upward trajectory for many years, but still remains one of the most affordable cities in the UK to buy properties in. Over the past 20 years, the average property price has increased by 173%, equating to £148,890, and in the last 10 years alone, it has seen almost £67,011 growth.
Despite this growth, the Derby property forecast is reporting an average property price of £235,141, which when compared to the UK average of £340,000, is significantly more affordable. Nonetheless, the demand for properties to rent in Derby has been pushing rental yields across the city.
With the average rental yield sitting between 4.80% and 5%, Derby is surpassing the majority of areas across the country and far exceeds the UK average rental yield of 3.53%. While the city is lagging behind with property prices, Derby’s competitive rental yields make for an ideal environment for property investment.
Not only do investors have the opportunity to enter the market with more affordable prices, but the growing demand for properties to rent in Derby could maximise returns over the long-term.
Key Projects Driving Growth in Derby
The future of Derby is set to be just as – or even more – impressive than its vibrant past. In recent years, the local community has recognised the potential of Derby, with many regeneration schemes now on the horizon, all of which are fuelling the Derby property forecast.
The Derby City Centre Masterplan is at the centre of the city’s regeneration, and will work towards solidifying Derby’s position as a hub of innovation. With plans to rejuvenate amenities and introduce new workspaces across Derby, the city will benefit from additional jobs and homes, as well as additional inward investment.
Specifically, the most notable developments within this scheme include the regeneration of Becketwell Performance and the Assembly Rooms, along with the development of a £20 million hi-tech business park. The combination of projects within the masterplan aim to meet the demands of an evolving population and offer a city to live, work and play in.
Not only is the regeneration of Becketwell Performance set to generate 2,000 jobs alone, but more than 4,000 jobs and 1,900 new homes are expected to emerge from the entire masterplan, which has a forecasted completion of 2030. In delivering new jobs and upgraded amenities, the demand for rental properties could continue soaring and house prices in Derby could also undergo natural capital growth.
The Derby City Centre Masterplan has catalysed many key developments across Derby, the regeneration of Nightingale Quarter being one of these. To meet the city’s growing demand for properties to rent in Derby, this £150 million regeneration scheme will deliver around 800 new homes for Derby.
Occupying the former Derbyshire Royal Infirmary site, the project covers 18 acres and will deliver advanced fitness areas, new cycle routes and green spaces for residents to enjoy. However, the site will continue to pay homage to the Derbyshire Royal Infirmary, with the iconic pepper pots set to be transformed into exhibition space, meeting rooms, a gym and a cafe.