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Firstly, a great investment hotspot will benefit from regular active investment via the local council or the UK government. This usually comes in the form of regeneration projects, in which areas of the city will be transformed. Usually, transformations will improve the quality-of-life aspects of the city, such as improvements to amenities, green living, business hubs and the creation of jobs.
Some transformations such as Leeds South Bank and Liverpool Waterfront have seen huge success. The projects boosted property prices in the areas significantly and introduced an influx of jobs, homes, and professionals in the area. Furthermore, rental demand has continued to grow in these areas, due to the rise in professionals in the areas.
Another factor which can help identify an investment hotspot is good transport links. Many commuter cities have seen growth in recent years due to the rise in home working. This allows residents to travel with ease via train, bus, plane or car for business or leisure. The need for transport is becoming an increasingly important factor for tenants, as they look towards commuter cities to save on rental prices.
Additionally, transport also boosts tourism in areas, which supports the local economy. This is beneficial as often an increase in footfall will bring with it higher levels of investment and a rise in local amenities. As a result, making areas more desirable will boost property prices in the area. An example of this is Wakefield, which has fantastic transport infrastructure, which has offered the city more opportunities to grow. Regeneration will often lead to an increase in property prices and offer investors the chance to benefit from strong capital appreciation.
Identifying key employers in an area is a great way to find areas where employment levels are high and will benefit landlords. If a city has key employers which employ hundreds or even thousands of professionals, the property demand will be high. This is because it creates a supply-demand imbalance, meaning there are not enough properties to accommodate the number of tenants actively looking.
Additionally, these tenants are usually desirable tenants as they are looking for long-term comfortable accommodation to fit their lifestyle. Furthermore, professionals have a steady income stream, meaning payments are highly unlikely to be missed. If an area has a low employment rate, it can be difficult to find tenants as demand is low. Also, the tenants in these areas cannot offer the same levels of security.
Education is one of the biggest factors of population growth in UK cities. Students who relocate to study represent a huge growth in the buy-to-let market. Although some students opt for student accommodations, others will use residential properties. Furthermore, graduates often stay in their area of study as they can secure skilled employment before the end of their degree. As a result, areas with top universities will have a high number of skilled professionals looking for high-quality accommodation.
Cities such as Manchester and Leeds have two major universities, with tens of thousands of students in each. Additionally, the cities hold a high graduate retention rate, meaning students are more likely to stay in the city once their degree has ended. For investors, this is highly beneficial as more students join each year, growing the city’s population, local economy, and buy-to-let market.
Another factor to consider when purchasing a buy-to-let property is the amenities available in the area. Having key amenities in an area will help determine the level of demand from tenants. For example, in an area aiming to attract young professionals, shops, cafes and bars will be incredibly desirable. These types of amenities enhance the desirability of an area and provide higher retention rates.
Additionally, building a great local infrastructure improves the quality of life in an area. Amenities such as gyms, supermarkets, doctors, schools, and green spaces mean that residents will be happy to stay in the area for longer. This is typically found in central areas, but as more UK cities move towards the 15-minute city concept, investors can cast a wider net to find their ideal property.
There are a number of factors that can help investors identify an investment hotspot. At CityRise, our investment consultants work hard to identify the UK’s top locations. While there are many factors to consider, here are the key points;
Using these factors can often help identify top investment locations. However, it is always best to speak to professionals who can look at the local property market and help find a great opportunity. Speak to a CityRise Investment Consultant today and find out more, here.
Download the Top 5 Investment Hotspots guide from the CityRise Investorpedia for free. This guide will help to identify the best areas to invest in. Some markets are perfect opportunities for investors to gain a huge capital appreciation and high yields. Whether a first-time investor or a seasoned investor looking to add to their portfolio, this guide is a fantastic starting point.
Download the CityRise Top 5 Investment Hotspot guide for free, here.
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