The Best Buy-to-Let Investments in the UK 2019
Location and tenant demand are the most important things to consider when looking at Buy-to-Let investment opportunities in the UK. There’s a lot of things to consider but rental property lives and dies on its location. This has created a huge demand for ‘hotspot’ advice. Landlords and investors want to know which areas either are performing or could be in the future to ensure a good property investment or strong investment portfolio with buy to lets.
The Midlands (Birmingham, Leicester, Nottingham)
As the beating heart of the UK, the government is investing in The Midlands to become the ‘growth engine’, driving professional, commercial and residential opportunities. With huge infrastructure changes and a variety of upcoming developments, the Midlands Engine is pushing ahead with Birmingham at its core.
The West Midlands saw great success in the employment sector in 2017, with workforce jobs increasing by 110,000. The region is home to 50% of the UK’s industrial stock and plays a critical role in the UK’s supply chain, thanks to a central location and unrivalled links with the rest of the nation.
Birmingham has seen particular interest from investors thanks to the transformational ‘Big City Plan’, a project that is looking to provide commercial, office and residential space as well as excellent lifestyle and infrastructure improvements.
The North (Manchester, Leeds, Liverpool)
Looking at the wider UK market, the North performed excellently, experiencing huge property price growth of 6.5% over the last 12 months. With a combination of rising rents and excellent growth, the North-West, in particular, has recorded the highest rental yields in the country hitting 5.1%.
The region is also popular with tenants. Key cities such as Manchester, Leeds, Liverpool and Sheffield are top destinations for people leaving the capital, a number that hit 291,620 in 2016 compared to 36,480 in 2012.
London Commuter Belt (Slough, Basingstoke, Reading, Oxford)
The Commuter Belt is an attractive prospect for investors that are looking to find London tenants. Offering more affordable living, focused employment opportunities and excellent access to the capital, locations such as Slough and Basingstoke are experiencing incredible growth.
With many people looking to leave the London property market and choosing the Commuter Belt, certain areas are forecasting property price growth as high as 35%. This is helped by renewed regeneration projects, commercial developments and the presence of global businesses, who have relocated headquarters to areas such as Slough and Reading.
Why Invest in UK Buy-to-Let?
Crucially, for investors, property investment can provide two different income streams, from rent paid by tenants to capital growth on the overall value of the property. As renting grows in popularity as a lifestyle choice, property represents an alluring investment opportunity.
As a physical asset that is still in high demand across the UK, buy-to-let property represents a reliable and versatile investment. While all investment comes with risks, property is generally seen as being more stable than investments such as stocks and shares.
It helps that the Buy-to-Let property market is still a viable investment field, despite government measures. The rental market is growing at an unprecedented rate alongside the rise of ‘Generation Rent’, driven by issues with affordability and a rising undersupply of residential properties while demand for rental properties grows. Experts anticipate that the private rental sector will grow to make up a quarter of the wider UK market in the next five years, a huge jump in the last 20 years. With the market already worth an eye-watering £1.29 trillion in 2016, it’s easily the fastest growing property sector in the country.
The wider UK market has already seen an increase in the average price of UK flats, which has risen by £1,250 per month since 2013. These increases equate to nearly £75,000 over the last five years and don’t seem set to stop.
With the population expected to swell to around 74 million in the next 20 years, the potential demand for housing is vast. Many of the major ‘first’ cities are falling behind on delivering housing quotas, increasing the impact of the ongoing residential undersupply. This means that the Buy-to-Let sector is still a very viable opportunity for a lucrative investment. Investors would be wise to consider a Buy-to-Let market that is fuelled by the incredible demand, growing rental yields and low-interest rates that are creating a ‘perfect storm’.