Although residential property price growth in the UK has been fairly subdued of late, buy-to-let investors are still ably to expect a strong return on investments in certain areas over the next few years.
With changes to buy-to-let tax relief and increases in stamp duty creating a challenging investor market, these locations offer a potential goldmine for the savvy investor, according to the property investment experts, which used figures taken from PropertyData, YourMove and Land registry data, with average property prices from Rightmove.
Narinder Khattoare, CEO of Kuflink, said, “Despite the challenges facing the UK property market, our analysis has identified five key areas showing very promising signs of growth.
“We’ve highlighted these locations as likely hotspots in 2018, with the potential to offer significant returns for a savvy investor”.
Named one of the Rough Guide’s Top Ten Cities to Visit in 2016, alongside Reykjavik and Vancouver, Hull has recently undergone a major regeneration project, with the government pledging £250m to develop public and private infrastructure, and fund the creation of 7,500 jobs.
As the UK’s current City of Culture (a title it will hold till 2020), Hull has a spotlight on the world stage, and a raised profile as a world-class arts destination.
With house prices yet to catch up to its increasing popularity with young professionals, averaging £121,004 and up 8% on 2015, investors should be taking note of this cultural urban enclave.
Along with the accolade of being the UK’s oldest town, Colchester is also one of the UK’s fastest growing cities, with an 18.9% population increase from 2001-2015. The town boasts lower than average house prices in comparison to neighbouring Southend-on-Sea and Chelmsford, direct transport links to London, and access to picturesque countryside nearby, making it ideal for both families and young professionals.
House prices in the area have been relatively unaffected by the national slump in prices, with capital gains resting at an impressive ten percent and making for sizeable ROIs for investors.
Situated in the borough of Greater Manchester, Salford serves Manchester’s 100,000 strong student community with excellent transport links to a thriving city centre, and investors can expect yields averaging twice that of London at around 5%.
Salford Quays is home to the second largest media hub in the UK, and “Second Tier cities” such as Manchester have seen interest grow rapidly in recent years.
With £1bn in backing from the government’s Northern Powerhouse Initiative earmarked for the region, Salford is likely to continue its upwards trajectory as a focal point for investors.
Continuing the trend of up and coming commuter belt towns, Luton in Bedfordshire is one of the ones to watch in 2018. The town has seen an influx of renters age 25-29, up nearly 9% between 2015 and 2016, attracted by Luton’s below average prices and London links.
Alongside an increased appetite for avocados, millennials also bring with them high demand for rental and new-build properties, with rental price growth currently around the 5% mark and showing no signs of slowing.
This sleepy Nottinghamshire town has been chosen as the only East Midlands hub for the HS2 rail project, and will see the creation of a major depot, a proposed “garden village” city, and a fifty-one minute direct link to London by 2033.
With planned connections to Leeds, Birmingham, and London, and a cheaper than UK average house price of £191,623, investors looking for a long-term commitment can expect to benefit from added jobs, housing, and an influx of private renters.