Throughout 2019 - and certainly since Brexit - we have seen a shift in the areas of the K which are the best for investors looking for buy-to-let opportunities. Back in 2015, anyone you asked would have said hotspots such as London were sure fire profit-makers. However, since the referendum, we have slowly seen a shift from the south as a focal point for investment to the north, where major northern cities such as Manchester and Birmingham are now at the top of the pack for buy-to-let investment.
At the top of the list of buy-to-let investment opportunities in 2020 is the city of Birmingham. In 2018, the city attracted the highest number of foreign direct investments outside of London and the south east to now have a number of projects totalling billion of pounds (£) in or planned for development in the next decade.
With 1.2 million residents already, Birmingham is outpacing many large cities for population growth and popularity, which has in turn left the city in desperate need of property investment and development with a large disparity between the demand for city centre accommodation and the current supply levels. As a result of this, the price of property in the city has skyrocketed over the past few years, with Knight Frank reporting growth of 19.3% since 2014, and a predicted further growth of 12.5% by 2022. Rental yields in Birmingham are also an appeal for investors with PropertyData reporting an average net 4.4 - 5.3% in 2019.
One of the biggest cities in the north, Manchester has quickly become a hotspot for not only residents, but business in the past few years, with big names such as the BBC choosing to move their headquarters to the city. Named as one of the most exciting places to live and work in the UK, the city constantly attracts a supply of students, young professionals and families.
With a wealth of investment already plugged into the city in the past few years, the skyline of Manchester has changed dramatically, with hundreds of city centre apartments being built currently. This influx of development has resulted in property prices rising a massive 22.09% since 2014 (PropertyData). Rental yields have also remained some of the highest in the north west, with some areas such as Fallowfields reaching an average net of 7.3%.
"The face of the lettings sector has changed quite considerably with the advent of technology-based solutions to traditional problems, and now even the most amateur of buy-to-let landlords can own a home on the other side of the UK and manage their investment efficiently and effectively.
More accessibility via digital rental platforms now provides landlords with great empowerment when managing their property portfolio and they can do so any time, day or night with greater peace of mind" - Calum Brannan, Founder and CEO of Howsy.
Right at the top of the buy-to-let list for 2019, and remaining high for 2020 is Liverpool. With a number of postcodes in the top areas for buy-to-let returns - including L7 achieving 8.2%, and L1 achieving 8% - Liverpool has seen an influx of investment in the past few years. During 2018 these two postcodes saw impressive growth of 15% and 12% respectively, however the city in general has seen a slow down in price growth in 2019.
Despite this, Liverpool - birthplace of the Beatles - has secured itself as a city with great career prospects, top investment opportunities, and rising tenant demand. JLL reported recently that property prices are expected to rise by 2% in the city, and rents by 3.5% through 2020.
The new age of letting agent not only provides this greater peace of mind but as they tend to operate on a UK-wide scale, they are better placed to deal with the day to day needs of the buy-to-let sector, whether it's one property at the other end of the country, or a number of properties spread over different regions.
"As a result, landlords are no longer restricted to investing within the local vicinity to keep tabs on their property or forced to pay exuberant fees for an agent to do so, leaving them free to buy in one section of the market and invest in another to maximise their financial gain across the board" - Calum Brannan, Founder and CEO of Howsy.
Coming up quite a lot in 2019 has been Sheffield. Just south of another investment hotspot for 2020 - Leeds - Sheffield has risen up the tables with its great rental demand and undersupply of good quality accommodation, especially in the student sector, due to prices in the city still remaining relatively low in comparison to most UK cities.
However, these low prices won't be around for long - good news for those investors looking for capital appreciation! Property prices in the area have grown 19.5% since 2014, and an incredible 223% in the last 20 years. With £480 million plugged into the city in the past few years vastly improving its facilities, shopping, amenities and connectivity, it's the growth in rental yields that is attracting investors most. The city has seen average net yields of 7.3% in 2019, and this only predicted to grow further in the coming years.