We evaluated a number of crucial factors regarding the area, such as previous performance, present returns, and future potential, while determining the best places to invest in UK real estate in 2023. Property costs, rental yields, tenant demand, infrastructure, employment, population growth, and affordability are just a few categories into which they might be subdivided.
The United Kingdom property market has always been a popular investment destination for both local and international investors. With a strong economy, a stable political environment, and a developed infrastructure, the UK property market offers investors a wide range of opportunities. However, post-COVID-19 and the looming market uncertainty, as we head into 2023, investors are wondering where to invest in UK property. If you’re interested in buying or selling your home, be sure to get a get a free house valuation, to know the ongoing market rates.
Let’s check out the best areas to invest in UK property during 2023.
The real estate market in Greater Manchester is flourishing and doesn’t appear to be slowing down anytime soon. This area has long been acknowledged as one of the finest regions for property investment.
Formerly known as the industrial city, Manchester is now paralleled with New York City because of its creative sectors and large population compared to the available housing. Due to its perennial attraction for more and more companies and renters, property prices have increased by 9.3% during the last year.
The rental market in Greater Manchester has experienced a boom in demand and rent hikes as a result of the region’s intense need for accommodation. According to Rightmove statistics, the average asking rent per calendar month increased by 20.5% in Manchester and 17.6% in Salford in Q3 2022 compared to Q3 2021.
London has always been a popular destination for global real estate investment. Despite having the highest home prices in the world, the UK capital has had rapid capital growth in recent years. Especially in the rental market, areas of Prime Central London have experienced surprisingly high demand.
The Royal Borough of Kensington and Chelsea, in particular, offers a variety of upscale residences with safety, privacy and proximity to top-notch schools and transportation options.
It is recognized among the most desirable residential districts and has anticipated growth over the next several years as new investment and redevelopment projects are planned to be implemented.
Birmingham continues to be one of the best places to invest in 2023 due to ongoing renovation efforts around the city. The Big City Plan, a 20-year transformation project for the whole city, has advanced over the halfway mark and has significantly improved the city’s downtown, a number of its suburbs, as well as infrastructure and transportation.
Birmingham’s affordability is one of its major assets. The city is drawing and retaining a sizable number of skilled individuals with the funds to spend, thanks to the fast-growing tech industry and thriving finance sector. With 40% of the population under 25 and a 49% student retention rate, Birmingham continues to be the most preferred destination for those relocating out from London. Birmingham also has a sizable prospective rental market.
In the most recent data from Zoopla, Liverpool is said to continue to generate high gross rental returns at 7.02%, the second highest in the northwest, making it a strong candidate for the title of the best location to invest in real estate in 2023.
According to the Land Registry data, with a 42% increase over the previous five years, house prices have grown rapidly. Liverpool’s average costs are 37% lower than the national average, therefore it is still very reasonable for homebuyers. Due to this and the area’s strong tenant demand, Liverpool has some of the best-performing rental yield neighbourhoods in the nation.
In addition, Liverpool’s excellent income-to-home price ratio of 4.9 emphasises how affordable it is given the size of its labour force. The Liverpool Waters initiative, a £5 billion, 30-year plan aimed at bringing in more tourists and creating over 17,000 new employment, will be one of the most significant rehabilitation projects for the city.
Newcastle, the most populated city in the North East and the eighth-largest city in the UK by population, is one of the most reasonably priced destinations on this list, contributing to some of the exceptional rental returns in the country.
While the average yield in Newcastle is 7.7%, postcodes like NE1 and NE6 offer high yields (around 8% and 9.2%, respectively), and the average property price in Newcastle is still 33.6% cheaper than the UK average. This presents a fantastic opportunity for real estate investors to earn excellent returns.
Since the city is known for its high scale housing and multi-national brands, it is an ideal destination for major corporate offices and headquarters. At the same time, the city is also expanding on a solid educational and technological base to offer a level of professional options unmatched in the area.
With the initiative to develop into a UK tier 2 sustainable city, Sheffield is a strong choice for investors seeking where to invest in Europe’s greenest developing cities.
Sheffield’s retail industry has been developed with an investment of almost £480 million, demonstrating a commitment to satisfy the expectations of a growing population. With projects attaining rental rates of up to 7%, city-centre regions have become one of the best areas to invest in rental property.
Sheffield’s ongoing attempts to establish itself as a premier UK city has paid off and the city now anticipates a 28% increase in house prices in the upcoming 4 years. Due to its future potential, Sheffield is a strong choice for investors seeking where to invest.
Leed’s economy is one of the fastest-growing in the nation and is currently comparable to that of several major European cities, which is luring more working professionals in search of greater incomes. This can be seen in the number of individuals moving from the city to the North. Since 2018, approximately 10% of Londoners have chosen Leeds, making it one of the prominent areas to invest in rental properties.
With an estimated 800,000 inhabitants, surveys indicate that 73% of homes in Leeds presently rent, making the city a popular choice for investors looking for steady, long-term renter demand.
Investing in UK property can be a great way to earn a steady income and build long-term wealth. With the right strategy and a bit of research, investors can find profitable opportunities in the UK property market during 2023.