Top 3 Buy-to-Let Areas to Watch in 2023

Buy-to-Let property investment has emerged as one of the most lucrative strategies for investors, and the UK market stands out as a prime opportunity. With the housing market experiencing significant growth in 2021/22, there has never been a better time to get involved.

But with so many options available, you may be wondering how to get started with buy to let property, and where you should put your attention.

Here, we highlight three top property investment hotspots that should be on every investor’s radar in 2023.

Photo by Aaron Sousa on Unsplash

Liverpool: A City of Growth and Potential

Liverpool has become an attractive destination for property investors due to its relatively low housing prices and high rental demand. The city boasts impressive investment properties with substantial price growth.

According to Zoopla, Liverpool has outperformed some of the UK’s largest cities in terms of price growth, witnessing a 7.2% increase in the past year and a remarkable 32% increase over the last five years to 2022.

With a young population in the city centre (75% aged 17 to 29) and consistently growing rental prices, investors can expect solid returns from their purchases in Liverpool. The city’s regeneration efforts have transformed it into an economic powerhouse, making it a highly profitable investment option.

Despite the challenges posed by the pandemic, Liverpool has maintained its reputation as an upwardly mobile city, indicating long-term growth potential.

Luton: A Commuter Town with Promising Prospects

As the cost of living in London continues to soar, many people are seeking alternatives outside the capital. Luton, a commuter town with excellent transport links and proximity to London, has emerged as an unexpected investment opportunity. This town is particularly appealing for investors looking for solid capital gains at a lower entry point.

Luton has implemented a robust regeneration plan to address its housing shortage by constructing new homes to meet the rising demand.

According to Zoopla, the average rent in Luton is 27% lower than in London, standing at £839 on average. Property investors can also expect a gross average rental yield of 4% in Luton. With Central Luton just 22 minutes away from London’s business district and railway connections to Leeds and Sheffield, it is a crucial investment hotspot with the potential for high returns, especially for those targeting young professionals as tenants.

Manchester: The Undisputed Champion of Buy-to-Let

Manchester consistently ranks as one of the best UK markets for buy-to-let investment and is often considered the heavyweight champion in this field. The entire North West region is predicted to experience an 11.7% increase in prices by 2027, further solidifying Manchester’s dominance in the market.

Similar to Liverpool, Manchester has undergone a significant transformation in recent years, leading to a substantial rise in property prices. A recent study showed that Manchester homes witnessed the highest price increase in 20 years to 2022, soaring by 143% from £73,910 to £179,537.

Manchester is a strong competitor to London and offers the potential for capital appreciation returns that rival its impressive growth between 2017 and 2018.

Manchester’s appeal lies in its attraction to young professionals, with an impressive global business and employment growth rate of 84% between 2002 and 2015.

The city narrowly trails behind the Midlands in terms of popularity among young professionals.

With Manchester’s continuous growth and prosperous employment opportunities, it is an investment destination with a bright future.

In Conclusion: A Glimpse of the Future

An investment truly thrives when investors have their eyes firmly fixed on the future. While some of these cities may not appear to be the most lucrative investment options today, they are undoubtedly the most exciting places to keep a close watch on, especially when considering future prospects.

Despite some concerning predictions at the start of the year, 2023 presents an ideal opportunity to diversify your portfolio and invest in UK property.

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