Throughout 2022, there was sky-high rental demand, which has boosted property investment prospects. The ongoing housing supply and demand imbalance has dramatically impacted the private rented sector across the UK, pushing rents up and creating the need for more rental properties.
Despite recent economic uncertainty, about half of property investors are planning to make additional property purchases throughout 2023. But where will be the best places to invest moving forward?
After looking at a wide range of data and research and using our own extensive knowledge and experience in the UK property market, here are the top 8 places to invest in UK property during 2023.
1. Greater Manchester
Greater Manchester’s property market has been booming, and the region has secured its spot as one of the best UK property investment hotspots for a number of years. Manchester and Salford are often leading the way as some of the top areas to invest within the region.
In recent years, Greater Manchester has undergone a significant amount of development and regeneration. This has been paired with rapid population growth, particularly of young professionals, and a growing and thriving economy.
As there has been such strong housing demand across Greater Manchester, the rental market has seen a surge in demand and rent increases. The average asking rent per calendar month in Q3 2022 saw a 20.5% increase in Manchester and 17.6% rise in Salford compared to the previous year, according to data from Rightmove.
As the region is home to healthy rental yields and house price growth, the two cities were also ranked in money.co.uk’s top 20 areas for landlords to invest. An increasing number of new high-quality homes are being brought forward. Currently, there are a range of modern, forward-thinking developments to invest in.
2. Prime London
London has been a leading global property investment hotspot for some time now. While the UK’s capital has the highest house prices, capital appreciation has been strong in the past couple of decades. Areas of Prime Central London have seen especially high demand, particularly in the rental market.
Specifically, the Royal Borough of Kensington and Chelsea has a range of high-end homes with privacy, security and access to exceptional schools and transport links. It’s one of the most coveted residential areas and is projected to register growth in the coming years as additional investment and regeneration projects are expected to be brought forward.
With exciting capital growth prospects and rising demand, property investors are increasingly looking to invest in property in this part of London. And there as some top-notch new developments coming forward in this area as the capital is the most valuable new-build market, according to market analysis by Unlatch.
3. Edinburgh
Edinburgh is another exciting city to invest in with solid house price growth, rental demand and economic performance. With a booming economy, more employers are moving to the city, bringing more jobs and people. The city also benefits from a large percentage of private renters, often ensuring high returns and low void periods for landlords.
Rightmove data shows Edinburgh has had significant growth in its rental market with average asking rents having increased by 18.0% in the past year. Scotland is also becoming a bigger new-build market with Edinburgh being the second most valuable new-build sector in the UK, providing a range of opportunities for property investors.
4. Newcastle
As the largest city in the North East, Newcastle boasts a thriving hub of business and culture. It has a growing community of students and professionals, making it a great location for landlords to invest in.
And with the North East as a whole slated for significant house price growth in the next five years and as Newcastle often leads the way, this provides strong property investment prospects for UK landlords.
5. Cornwall
Situated along 300 miles of coastline, Cornwall attracts a substantial number of visitors every year, and many people dream of calling it home. The population continues to growth, making it one of the most sought-after locations in the UK. At the same time, it’s become a leading property investment hotspot with a growing rental market.
There are a number of areas in Cornwall seeing surging demand. Torquay has recorded a 17.7% growth in asking rents over the past year. And St Ives was recently named the best area to live in as voted by residents through Rightmove’s annual survey.
6. Liverpool
As the North West is expected to have some of the most significant house price growth in the years to come, it’s probably unsurprising there are two cities from this region on our list of the top places to invest in UK property. And with the city going through extensive regeneration, this provides opportunities with exciting capital growth prospects.
While house price growth in Liverpool is expected to be significant, it still provides low entry prices. This is paired with the potential for high rental yields, particularly as the city has been transformed into one of the UK’s leading business destinations.
7. Cardiff
As the largest city in Wales, Cardiff has benefited from a growing economy in recent years, and there are some major redevelopment schemes on the way. Its property market has also registered strong growth with a large and increasing population of students.
Rightmove data shows that Cardiff has had a 19.6% increase in asking rents in the past year, which is the third largest increase in Great Britain. The city is also home to more affordable property prices, making it an appealing investment location for many.
8. Oxford
As one of the prettiest small cities in the UK, Oxford is globally renowned for its universities, research and technology. It has a rapidly expanding population and a thriving property market packed with investment opportunities.
Oxford was ranked second on Aldermore’s 2021 Buy to Let City Tracker. This was based on its average total rent, yields and house price growth over the past decade, lowest number of vacancies as a proportion of total housing stock, and the percentage of the population in the rental market. These areas continue to make this city a top place to invest in.
If you’re planning to invest in property during 2023, here’s a helpful guide full of property investment tips. To discuss your options, get in touch with our team of expert advisors.
