There are several aspects to consider when it comes to the Best Places to Invest in Real Estate 2022 UK. Some of them are pretty evident. But, it is critical to understand what makes the best option before you make a considerable investment. We have put together a detailed guide on real estate in the UK for you. So keep on reading:
Following the chaos of 2020, the year 2021 provided several opportunities, particularly for the property industry of the UK. There have been numerous obstacles to overcome this year, from the initial Stamp Duty holiday deadline to yet another nationwide lockdown.
However, the momentum from the post-lockdown boom, combined with an economic recovery. It has resulted in more activity than ever before in the UK property market. And it is expected to continue through 2022 and beyond. “The UK’s major cities have long presented some of the strongest opportunities for property investors,” says Adam Price, CEO of Select Property Group, “and our findings suggest that this remains true today, as our metropolises provide promising GVA, significant population growth, and excellent business prospects.”
- 1 Researches Conducted to Find the Best Places to Invest in the UK 2022
- 2 Best Places to Invest in Real Estate 2022 UK: Cities
- 3 Best Places to Invest in Real Estate 2022 UK: Emerging Places
- 4 The Bottom Line
Researches Conducted to Find the Best Places to Invest in the UK 2022
A new study was conducted by Coulters Property, an award-winning solicitors and estate agency firm. It indicated that the landlords could earn a respectable 2.98 percent return on investment Best Places to Invest in Real Estate 2022 UK. Preston, Lancashire’s market town, has been classified as the most profitable city to buy a home. It has properties worth £176 378, and the average rental cost at £981 PCM. Eventually, delivering an annual profit of £5 256 – equivalent to £438 per month.
To calculate the ROI, researchers determined the average house prices in each city. Researchers determined the average house prices in each city to calculate the ROI. To calculate the yearly costs, the average monthly rental fees were calculated. And monthly payback costs were identified. Then researcher converted them into a percentage of the entire cost of a property to give the ROI.
The study looked at average house prices and profits across all cities: There is a significant difference in ROI between homes in England and Scotland. According to the data, Scotland offers a far higher yield for property investors than residences in England.
Best Places to Invest in Real Estate 2022 UK: Cities
Now let’s look at the data from all cities of the UK in detail. It will make it easy for you to decide where your investment should go.
Birmingham is one of the best cities to invest in 2022, maintaining a trend that began in 2016. Savills predicts that Birmingham will be one of the fastest-rising regions in the next five years, with price increases of 24% by 2025. Its affordability is one of its most significant advantages. According to Knight Frank data, the average income to average house price ratio in Birmingham is substantially higher than in the rest of the UK.
The city is attracting and maintaining competent workers with disposable income in this quickly growing city. Average rents have climbed by 30 percent in the last ten years. And are predicted to rise by 12 percent in the next five years. This has been fueled by tenant demand from young professionals leaving London and a growing population that is expected to reach 1.24 million by 2030.
With a market dominated by one and two-bedroom apartments, rental yields for property investors in these asset types are averaging above 6%. This is mainly true for the flats in the city center location. And a solid development pipeline is delivering new standards of quality, such as St Martin’s Place.
Birmingham has the most significant city Best Places to Invest in Real Estate 2022 UK outside of London. The local lettings business Barrow & Forrester recorded a 25.2 percent increase in rental demand for the city. And it is anticipated that the city will require 89,000 new homes to meet demand between 2011 and 2031.
Finally, new transportation links are strengthening some of the UK’s most vital connectivity underpinnings. Moreover, the Midlands Metro expansion continues to provide unparalleled connectivity. Primarily to burgeoning West Midlands destinations, while work on HS2 has started. HS2 is a generational undertaking that will transform Birmingham.
Southampton has a large foreign student population and a high demand for luxury university housing. One in every five Southampton residents is a student. It is the reason for the success of rental properties such as Vita Student Richmond House and Vita Student Portswood. It demonstrates the city’s high potential ROI for rental properties. According to Select’s forecasts, private rental dwellings will account for more than 27 percent of property in the city by 2025.
Southampton is also at the top of the leaderboard, with the Hampshire city being the number one property investment hotspot. Southampton came top in Select’s GVA ranking, second in business start-ups. And came third in employment growth and many firms per capita. Southampton was also ranked third in Select’s 2025 projection for the percentage of private rental dwellings. It indicates that investors have a lot to look forward to in the future years.
Manchester is playing a leading role in capital growth in the North. And it is also poised to be a key UK investment hotspot in 2022. This city is the home of MediaCityUK, is expecting 1.2 percent economic growth. That too by the end of 2021 as a result of its collection of international corporations.
The city’s abundance of job prospects contributes significantly to Manchester’s large population. The current population is over two million people. Manchester’s rental market is expected to rise by up to 12.5 percent by 2025, with students accounting for over 100,000 of the city’s population.
According to Savills’ revised estimates, future growth is likely to follow the trend, with property prices expected to rise by 28%. This is primarily due to the city’s fast-rising economy and population. Both of which have achieved great strides in recent years.
In terms of future development, the Great North Rail project shows high potential. It is projected to be completed by 2022 and will allow 40,000 more passengers to travel. They would be able to fly to important Northern towns, considerably enhancing tourism in Manchester.
Manchester’s rise gives a lucrative opportunity for residential investors. The city has risen to first place in the 2025 rental homes prediction. Moving up from third place in 2019. It is expected to outperform Outer London and Birmingham, demonstrating its attractiveness to investors over the next four years. Lastly, Manchester’s rental yield has increased by 10% in a year, illustrating the market’s strength.
London and its neighboring suburbs benefit from rapid population growth, as well as constantly high property values and promising commercial opportunities. Outer London ranked first in Select’s rankings for both business start-ups and business stock.
According to Rightmove, 53% of tenants in Inner London have inquired about relocating out of the core area. It possibly indicates a rise in interest for apartments just outside the capital’s center zones and farther afield.
Nottingham, a sleeper hit for the UK property market, has made significant progress in recent years and is now a critical investment region. It is a city which is less expensive than other major cities such as Manchester. But still offered quality yields of around 9% in several city center postcodes in 2019, including NG1 (the city center) and NG7 in the surrounding area. This also includes the University of Nottingham, though this has decelerated since lockdown to an average yield of 4.92 percent.
According to JLL, Nottingham’s key strength is its historical capital growth and future long-term yield growth. That is expected to be among the strongest in the country.
A significant amount of tenant demand supports these values-driven by two major UK universities located relatively close to the city center. As well as a thriving creative quarter supplying the rising graduate pool.
Nottingham is also home to Queens Medical Centre, a regional super hospital. And one of the largest teaching medical centers in the UK. It has over 6,000 medical professionals contributing to the city’s expanding demand for housing.
Although Nottingham is far less expensive than other main cities in the UK, its long-term growth is expected to be among the strongest in the country. The city’s attractiveness among an expanding graduate pool has resulted in several Nottingham postcodes, such as NG1 and NG7, reaching 9%. Nottingham in 2022 gives investors the opportunity for both capital appreciation and cheap rents. With two important institutions in central Nottingham and an average property price of just £230,522.
Newcastle, one of the Best Places to Invest in Real Estate 2022 UK largest cities by population, is one of the most affordable locations on this list. It is why the city results in some of the best rental yields in the country. At the same time, postcodes such as NE1 and NE2 offer high yields in the city center, with the average yield lying at 5.23 percent.
A range of corporate offices, as well as strong education and digital sectors, are present in this city. Moreover, there is an established standard of professional opportunities. All of this helps to drive this demand while supporting the city’s entrepreneurial side. Other than this, Newcastle has one of the highest graduate retention rates in the country. And is one of the fastest-growing places for new start-up enterprises. This is anticipated to increase demand from young professionals, which will raise rental costs and thus yield.
Newcastle’s affordability has been ascribed to capital growth issues in the last five years. But the combination of low prices and strong yields is establishing Newcastle as a significant investment site for 2022. It is due to the average rental yield of 5.23 percent.
Portsmouth ranks highly in all of the ranking categories, including predicted rental dwellings, which place it in the top five. Portsmouth is also ranked in the top ten for business stock and business start-ups. The city shows a significant economic and job growth potential in the coming years.
Portsmouth is a significant London commuter belt city that attracts investors and tenants. Mainly because of its easy access to London and picturesque coastal lifestyle. Moreover, this city of the UK is a worldwide hub for the aerospace, defense, maritime, and engineering industries. It also has a strong rental culture and great rental return prospects. It all makes it an excellent choice for investment in South England.
Leeds is home to 800,000 people, and 73 percent of homes rent, making it a dream for investors looking for consistent renter demand. It is another major power in the North. It has quickly established itself as a crucial city for investors seeking long-term rental returns. And has a firm presence in the list of the best cities to invest in UK property in 2022.
While capital growth has been slow in comparison to other cities on this list, rental demand in Leeds is rapidly increasing. Yorkshire, according to JLL, will rise by 28% over the next five years. It will own to the aforementioned demand as well as the implementation of many Build-to-Rent initiatives.
Glasgow real estate has traditionally been overshadowed by Edinburgh. However, now, the second-largest city in Scotland is beginning to emerge. Glasgow’s economy is expected to perform on pace with Edinburgh’s during the next five years, as evidenced by its property market.
Scotland, on its own, has a diverse range of Best Places to Invest in Real Estate 2022 UK can expect a fair return on their investment. When it comes to producing the most profit for landlords, Glasgow outperforms all other Scottish cities. Including an average house costing £181,245 and rent costing £961 PCM. This shows investors could make an annual profit of £4,836, with a monthly profit of £403 an ROI of 2.67 percent.
Over the next five years, sale prices are predicted to rise by 24.4 percent. While rental growth is expected to rise by 10.5 percent. This comes after five years of strong capital appreciation. And it will be encouraging news for investors considering a move to Scotland. The city of Glasgow has a healthy development pipeline of 4,000 purpose-built rental homes and multifamily plans. This means the pieces are in place to accommodate Glasgow City Council’s recent promise to double the city center population.
Best Places to Invest in Real Estate 2022 UK: Emerging Places
We have discussed some of the best cities to invest in in the UK. However, now, let’s move on and talk about some of the emergy places. We have listed below some of the places that have amazing potential for growth in terms of real estate in 2022.
Thanks to Slough’s present transportation connections, London and Heathrow can be reached in under 20 minutes. Its population is made up of people who work in the capital but want to live somewhere more economical. This makes it an ideal market for a Buy-to-Let investment.
However, Slough’s local commercial sector should not be overlooked. Slough is one of the most productive towns in the UK. It is home to some of the world’s largest corporations, including O2, Ferrari, and Honda. Slough has an extraordinarily strong economy fuelled by a high-earning workforce, with a GVA per worker of £82,000 more than the capital.
This results in potentially great rental yields, especially when compared to adjacent London’s relative affordability. The South East’s rental prices have increased by 10.6 percent in the last year. They have even outpaced London’s -0.2 percent fall.
According to JLL, rental rates might climb by 8% over the next five years. At the same time, property prices could rise by 17.5 percent. This is a strong indicator of why you should invest in Slough. As it is supported by roughly £3 million in redevelopment across all industries.
Oxford is the top UK city for economic success and well-being according to a Best Places to Invest in Real Estate 2022 UK, owing to outstanding professional prospects in the health, education, research, and technology sectors. The John Radcliffe Hospital is part of one of the country’s largest NHS teaching trusts, while the Mini Plant in Oxford is one of the city’s greatest private sector employers.
Oxford is experiencing significant population expansion with a population of roughly 175,000. The predictions are indicating that it might grow by 15,000 people every decade. When you consider that Oxford is also a top ten UK tourist destination. And gets 526,000 visitors per year. You have clear evidence of increased demand.
Oxford’s universities are certainly crucial to its current success and future potential. As it is one of the most well-known names in the UK. The University of Oxford is the county’s single largest employer. It employs approximately 14,000 people while recruiting the best and brightest from around the world. Over40,000 students attend the University of Oxford or Oxford Brookes University. This means that the student accommodation market is a regular play in the city.
Reading’s population is anticipated to reach 574,000 by 2026, greatly above its current population of roughly 145,000. With the fifth most skilled workforce in the UK and one of the highest employment rates in the country. It provides investors with lots of constant tenant demand, backed by companies such as Microsoft, Oracle, and Huawei. This city has a strong tech foundation. It confirms its position as one of the leading players in the Thames Valley in terms of business and revitalization.
Future development plans include a £900 million investment in Reading train station and local infrastructure. And a £50 million investment in the University of Reading’s Science and Innovation complex. Then, lastly, a £20 million investment in a John Lewis flagship shop. This displays confidence in Reading’s future as an investment destination. And it is a major contributor to its position on our list.
Derby has become famous for its ties to several worldwide corporations, including Rolls Royce, Toyota, and Bombardier Transportation, since kicking off Britain’s Industrial Revolution. It is the sixth most productive city in the UK. And also has a significant student and graduate demography as 48 percent of its total population is under 35.
Derby’s population has increased in recent years and is expected to exceed 312,000 by 2037. This will propel the city to new heights. More redevelopment initiatives and housing options are being introduced as the city’s prominence grows. And the 2030 Derby City Centre Master Plan planned to leverage £3.5 billion in investment in the following years.
The city has long been a transportation hub, offering access to the country via air, road, and train. Not only do these linkages put over 6 million people within an hour’s drive of Derby. But the HS2 station at Tatton will increase the city’s profile even further. Commute times to many major UK cities such as London, Birmingham, and Leeds would be reduced to less than 55 minutes. And Derby could quickly become a magnet for both inbound and outbound commuters.
The Bottom Line
It looks like Southhampton has taken the top rank among Best Places to Invest in Real Estate 2022 UK. It is placed top out of a list of 20 cities, which also includes Manchester and Liverpool. Smaller cities, such as Bradford and Exeter, are also included on the list.
As the UK economy recovers from the epidemic, investment in areas with high growth potential should be considered. This will depend on the population, employment, and GDP will be critical for achieving the best ROI. For example, a city like Manchester. Cities with excellent commuter linkages outside of London. As well as those with expanding digital industries will always be appealing to renters. It implies that property investors can still discover excellent value and opportunity in suitable regions.