First-Time Buyer: Where Are The Best Places to Invest?
Whilst purchasing your first property is a milestone, it can also feel daunting. There is a lot to consider and learn about as a first-time buyer. Especially given the unpredictability of the last year.
As a first-time buyer, it is important to know where to begin and how to make informed decisions when making your first investment. Knowing a few crucial specifics can mean the difference between average returns and maximising your returns. It pays to know the key trends and patterns so you can make the smartest possible decision. As the market is constantly changing, we have provided a comprehensive breakdown of the top investment locations for first-time buyers.
Recently crowned the best city for first-time buyers by Rightmove, we couldn’t start our list anywhere else. With property prices in more rural areas rising, now is the best time to buy in a city centre as prices are lower than usual. Demand is guaranteed to increase in city centres as people gradually return to offices and students return to face-to-face teaching in autumn.
For around £160,000 you could bag yourself a two-bedroom flat with a balcony in the heart of Leeds city centre. What makes Leeds such a fantastic choice for investors is the potential for capital growth. While prices are relatively affordable now, Leeds is quickly becoming an economic powerhouse.
Leeds is experiencing growth on a large scale. The South Bank regeneration project will be one of the largest in Europe – costing £500m. If you’re wondering how big that actually is, it is set to double the size of the city centre to cover the area of 350 football fields. It will also result in the creation of 8,000 new houses and nearly 35,000 additional jobs. Unsurprisingly, this is the city’s most significant transformation in over a century. This regeneration will provide a catalyst for the city’s economy. Therefore, Leeds is the perfect choice for first-time buyers. You can get a nice property for a small budget, on top of significant capital growth over time.
Sheffield is another great opportunity for a stable and lucrative investment on a smaller budget. As one of the more affordable locations of the Northern Powerhouses, demand has soared in the past month or so. One of the main reasons for this is the abundance of outdoor space. Sheffield was previously known as the industrial ‘Steel City’, but it’s now one of the greenest cities in the UK. In fact, it has more trees per person than any other European city.
This is a huge selling point of the city, especially as sustainable living is being prioritised. Also, lockdown has led many buyers in search of more outdoor spaces, especially as we head into warmer days. As revealed in a recent survey, over 55% of people are prioritising living near outdoor space. This percentage has increased by 13% over the last year and we predict this will continue to rise.
Despite house prices inflating across the UK, Sheffield has remained stable and affordable. Buyers can purchase a property for an average of £224,087. In addition, a typical flat is listed at only £148,702. Therefore, buyers with a smaller budget can still secure a safe and profitable investment. Because of the low house prices, the city generates some of the highest rental yields too.
Nottingham city centre is also high in demand. With the current asking price at only £142,068 for a city centre flat, Nottingham boasts some of the lowest prices in the Midlands. Most importantly, Nottingham is embarking on its £2bn regeneration project. The project will completely transform the city centre. The project will create more jobs, which in turn, will increase demand in the area. It will also massively improve transport routes and remodel its shopping centre.
A successful first-time buyer would ideally wish to get on the property ladder in Nottingham before the regeneration is finished. Prices are at a relatively affordable level. However, after the regeneration is completed, prices are expected to climb. Then, investors might expect to witness tremendous capital gain on their investment.
With its ‘Big City Plan’ well underway, Birmingham has remained a standout investment choice. Ever since 2015, when it was declared the most investable city in the UK for two years in a row, the city has gone from strength to strength. The city surpassed Milan, London, and Paris in the annual survey, ranking it sixth in Europe.
Birmingham not only benefits from being an affordable place to purchase a property, but it also has a great potential for capital growth. As of April 2021, Birmingham property has an average value of £207,523. This is an extremely low pricing point, especially when compared to other cities in the UK. For example, the average London home costs roughly £793,432. Indicating that houses in London are 282.33% more expensive than those in Birmingham. On top of huge regeneration plans, an investment in Birmingham will provide a high ROI.
The introduction of the HS2 travelling right through the heart of Birmingham will only increase demand in the city. The current transport time to London is 100 minutes, which is expected to half when the HS2 arrives. Already, several major businesses have relocated their headquarters to the city centre. For first-time buyers, Birmingham is an affordable area. Coupled with strong yields, consistent demand, and high predicted growth, Birmingham is nothing short of a prosperous investment choice for a first-time buyer.
Over the last year, prices in the countryside and coastal areas have drastically risen. Meanwhile, some of the city centres have stood still. This is following the increasing number of people working from home. In the future, we predict demand will increase in city centres again. More people will begin to return to the office as lockdown restrictions lift. Also, with significant regeneration plans in the pipeline for many major cities, the economy and business opportunity will attract even more residents.
For first time buyers, now is a fantastic opportunity to purchase a city centre or commuter town property. Prices are cheaper than normal and with big regeneration plans, your property is likely to see significant capital growth over the next few years. Specifically, with the introduction of the HS2, demand is predicted to soar in areas that will benefit from the new high-speed railway.
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