What is an Investment Hotspot?

Category: Investment Hotspot

An investment hotspot is an area which is considered extremely attractive to investors. This is because of a culmination of beneficial factors in the area. These are usually found in areas that have active investment in the form of regeneration.

This article will explore different elements that qualify a city as an investment hotspot, helping investors identify key buy-to-let locations themselves.

Author: Sam Whalley

Digital Marketing Executive

Contact

Share this article:

Regeneration

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.

Transport

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.

Employers

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

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.

Amenities

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.

CityRise Verdict

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;

Regeneration: How desirable will the area be over the next decade?
Transport: Does the area offer good transport links?
Employment: Are employment levels high?
Education: Is the city benefiting from top education?
Amenities: Does the location offer desirable amenities?

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.

Top 5 Investment Hotspots Guide

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.

16 May

Rental Yields vs Capital Growth

Investors who are considering investing in property are most likely looking for one of these things: a consistent income or for the property to...

Learn more
30 Apr

April Property Market 2024

Discover the latest insights into the April property market. As the North takes the lead, property prices remain steady, signalling an ideal climate...

Learn more
23 Apr

Inflation Falls to Lowest Levels Since September 2021

Inflation fell in February and looks likely to fall further during 2024. It is now at its lowest point since September 2021. This increases the...

Learn more
18 Apr

Manchester to Shanghai: A First for the North

First flight from Manchester to Shanghai set to deliver boost to North The unveiling of a new direct flight route from Manchester Airport to the...

Learn more