Best places to invest in property in 2023 | UK Buy-to-Let
Selecting a location for your next real estate purchase is one of the most important decisions for investors. Mobibi Invest highlights the best places to invest in property in 2023 for long-term growth potential.
Those paying close attention to the property market will understand that trends outside of the capital have given investors a clear indication of what regional markets have to offer.
Property hotspots, including the North West, the Midlands and London commuter belt towns, where buyers can find considerably lower entry-level properties, offer greater scope for capital growth and rising rental yields in the coming years.
Here, Mobibi Invest pinpoints the best places to invest in property in 2023 and why they should be considered for your next investment purchase.
As we delve into the performances of individual towns and cities, there are some clear highlights, including Manchester, which continues to perform well for investors looking for capital growth potential and reliable rental returns.
Over the last ten years, Manchester has been one of the biggest success stories for investors, delivering some of the strongest gains on the market. In the last year alone, values have climbed by 9%, with the average property price currently at £214,200 (Zoopla, August 2022).
In the Q2 Rightmove Rental Tracker Report, Manchester was ranked the UK’s number one hotspot for rental increases, with annual rental changes up by 23.4% in the year to June 2022.
For Buy-to-Let investors, Manchester’s local economy, rapid population growth, and appeal to young people – both workers and university students – make it one of the most viable locations for acquisition.
Plus, with an estimated 2,500 new homes per annum needed over the next ten years across Greater Manchester (JLL), this Northern Powerhouse city is at the top of our list of locations for Buy-to-Let investment.
For those looking to diversify their portfolio, Greater Manchester has emerged as a prime location for Purpose Built Student Property investment. It is ranked in the Top Tier in the 2022 Savills development league table. With over 100,000 students across five universities and boasting one of the highest graduate retention rates in the country (51%), it’s easy to see why student property in the city is an income generator for investors.
Click here to understand more about why Manchester is such a great place to invest, and to see some of the current properties available in this Northern Powerhouse today.
Home to one of the UK’s youngest and fastest-growing city centre populations, Liverpool has been a popular choice for investors seeking lower entry-level assets and higher-than-average rental yields.
According to Zoopla, average property values increased by 8.9% in the year to August 2022 in Liverpool, with values reaching £151,000.
The value on offer in Liverpool is clearly evident compared to the average cost of buying a home in the UK (£256,900). Moreover, lower entry-level property investment reduces Stamp Duty obligations, allowing investors to significantly reduce the upfront cost of purchasing through location diversification.
Liverpool is currently benefitting from an influx of public and private investment, including the £5.5 billion Liverpool Waters Scheme.
For Buy-to-Let investors, long-term regeneration commitments provide a unique opportunity for early adopters to capitalise on the future growth of a city, rewarding them with impressive long-term results.
With the city centre and the world-famous waterfront constantly improving, we expect Buy-to-Let assets in Liverpool to offer impressive sales price and rental growth. And, if Manchester’s property market is used as a regional benchmark, there remains plenty of room for gains.
Click here to understand more about why Liverpool is such a great place to invest, and to see some of the current properties available in this property hotbed today.
Located in the heart of England, Birmingham is the country’s ‘second city’ and is on track to be one of the biggest beneficiaries of the completion of High-Speed Rail (HS2).
JLL predicts that Birmingham’s economic growth will outpace the regional averages over the next five years. An early assessment of the impact of the 2022 Commonwealth Games on Birmingham expects GVA increase of £167-£251 million, creating between 4,678 and 7,002 jobs (FTE).
HS2 has also raised its profile for residents and businesses, with global companies including HSBC, PwC, HS2, BT, Barclays, KPMG and BDO occupying commercial space in the city.
For investors, the case for property ownership in Birmingham is impressive, especially considering that the average value of housing is currently £201,200, marking a +8.8% year-on-year climb, according to Zoopla.
The findings of Rightmove’s Q2 2022 Rental Trends Tracker have shown a sharp increase in rental prices in Birmingham City Centre, reporting a +16.1% annual change in rents.
Birmingham also has a sizable student population and has been ranked by Savills as a Top Tier location for Purpose Built Student Property investment in 2022. Investors considering alternative assets could benefit from investing in a lower entry-level market to secure higher-than-average rental yields.
Click here to understand more about why Birmingham is such a great place to invest, and to see some of the current properties available in the second city today.
With London’s average property price at £522,800 and asking rents hitting a new record of £2,257 PCM, it is no wonder why investors and tenants are expanding their property search to commuter belt towns.
Commutable locations outside of London offer more space and better value for money for investors and end-users; however, from a Buy-to-Let perspective, it is not just about the cost of investing.
After reading this guide, it might not come as a surprise that London no longer offers the same level of growth potential seen in regional markets.
Over the last 12 months, average values have increased by 4.1% (Zoopla) in London, with a modest five-year house price forecast of +8.2%, according to Savills. However, buyers looking for long-term gains have more potential for growth in the regions surrounding the capital (+13.5% South East and +13.5% East of England, for example).
When selecting Buy-to-Let property in the commuter belt, investors should consider the time it takes and the cost to travel to London, proximity to transport links and green space, and private investment in regeneration and infrastructure projects as indicators of a worthwhile investment.
Click here to get a better understanding as to why property in the London commuter belt could be a great investment for you in 2023 and to see some of the options currently available.
What will property prices do in 2023?
Property prices are likely the most talked about topic for home buyers and investors when considering available options.
Nobody wants to overpay or see the value of their purchase decrease after taking ownership. Therefore, it’s essential to consider the long-term picture before buying.
The latest five-year forecast from Savills expects the UK’s property market to flatten briefly in 2023. This means the growth available across the market will be more subdued next year than in previous years. Given the current political and economic headwinds, a slower growth rate across the real estate market should not surprise investors.
Instead of looking at house prices, we suggest affordability should be at the top of the checklists of investors. If you are buying with a mortgage, ensure you seek professional advice to get the best deal.
Cash buyers should consider lower entry levels, like the student property market, to beat inflation and make their money work harder.
Where to invest in property in 2023?
Now you have determined where to invest, it’s time to establish your goals and reasons behind investing in property and which opportunities on the market will help you to reach your expectations.
Discussing your investment options with the industry professionals at Mobibi Invest will clarify your options. In addition, you will have exclusive access to opportunities that aren’t widely available on the market.
For more information, contact Mobibi Invest to discuss your investment goals for 2023 and to establish the best options for your circumstances.
