If you’re house-hunting and working from home means that you can widen your search area, it may be difficult deciding where to buy.
Our home is usually our biggest investment, so of course you’ll want to see it increase in value. To achieve this, it’s important to buy in places that are up and coming, and while this can be difficult to predict, it is possible to identify key areas by assessing several factors that indicate property market growth.
New research taking in a wide range of information has been carried out which might help refine your search to find the best place to invest. The research, by money.co.uk, reveals the top ten best property investment areas following an assessment of average property price growth, business growth, the number of young people moving to the area, regeneration improvements, and transport links. It also looks at each area’s type of employment, income, and poverty rates.
Let’s find out more.
A list of the best emerging locations to invest in UK property
|Rank||Local authority||Population||Annual house price change||Annual income change||Annual poverty rate change||Annual employment change||Net inflow of 25–34-year-olds||Train stations per 100,000 people||Net change in businesses per 10,000 people||Up and coming property score /10|
|5||Argyll and Bute||85,430||25.0%||3.9%||-3.6%||0.0%||0.2%||16.4||-2.9||7.75|
A snapshot of the best places for property investment
Taking top spot in the table is East Cambridgeshire which has seen extraordinary house price growth of 16.5% over the last 12 months. It also has benefited from large scale regeneration which has had a huge impact. It has incredible employment opportunities – employment has increased by 1.5%, attracting young professionals to move to the area: the inflow of 25–34-year-olds was up 0.4%. Having one of the strongest economies in the UK makes it a clear contender when considering the best places to invest with the aim of seeing future growth . Average income rose by 4.5% and the poverty rate went down by -0.5%. The area’s major hub is Cambridge and the city’s rapidly growing economy makes it a popular place to invest in property. Travel links are good across East Cambridgeshire despite the area’s rural nature.
Eden in the Lake District comes in second place. This Cumbrian district has seen a massive 17.9% property price growth over the last year. While a negative change in business has been recorded, over the previous five years annual income has risen by 5.9% and poverty has decreased by 0.8%. The average property price in October 2022 was £271,596, an increase of 0.5% from September’s figures. The area’s natural beauty is an added bonus when it comes to assessing investment locations.
Taking third place in the list is the market town of Bolsover in Derbyshire, which saw the second-highest increase in business of all local authorities at 182.6 per 10,000 people. Property prices have risen 14.9% over the last 12 months and the poverty rate has dropped by 8.7%. However, income has increased at a slower rate of 2.8% over the last five years. Total employment has increased by just 1.4%. A new distribution centre is being built and planning permission has been agreed upon for 243 new homes, identifying it as one of the region’s property investment areas. Property prices here make it one of the most affordable locations on the list, which may make it interesting for those struggling to get onto the property ladder.
According to the list, East Devon is the fourth most up-and-coming area to buy in. The average property price has increased by 17.3%, and there’s been a 0.3% increase in young people moving to the area. Income has risen by 5.1% yet the overall percentage of business here has reduced by 20.6% per 10,000 people over the past five years. The East Devon area includes two Areas of Outstanding Natural Beauty which restrict the amount of new development to preserve its unique nature. Its proximity to the coast makes it a popular destination which may increase its appeal to property investors.
Argyll and Bute in the west of Scotland is in fifth place. It’s seen the largest property price growth of any authority, at 25% over the last 12 months. There are great transport links, but employment in this area has not increased over the last five years. The area benefits from relatively low property prices: the average property price in November 2022 was £206,735. On average house prices rose by around £3,400 every month last year. The inflow of 24-34 years olds was up 0.2%; the annual employment change was 0%; the regeneration annual income change was 3.9% and the poverty rate change was -3.6%.
While the remaining locations in the list often have larger populations, they are experiencing lower levels of property price increases, business expansion, and income growth.
Is now a good time to invest in property in 2023?
Taking an overview of the market, Claire Flynn, money.co.uk mortgages expert commented:
It’s worth bearing in mind that while some are forecasting further price drops in 2023, there may be some potential signs that the property market is stabilising following the impact of the mini-budget. Halifax recently reported a 1.1% month-on-month average price increase in February. This could mean house prices aren’t set to drop as much as some expect.
Ultimately, whether it’s the right time for you to buy or sell depends on your individual circumstances. If you’re ready to purchase a property, make sure to do the numbers and check you can afford the mortgage and other associated costs. If you plan to own the property for a significant amount of time, this could also help you weather any short-term market turbulence.
Buying rental property
If rental income is your aim, you need to assess a slightly different range of location factors to identify the best places to invest in. These include finding areas with consistent tenant demand, where the best rental yields can be achieved. Major UK cities are a good starting point as there will be a pool of tenants including young professionals of working age creating good rental demand.
If you’re considering student property investment, you need to examine the best UK cities with affordable house prices in traditionally popular areas for students. Cities in the north east and north west may offer the best rental yields and could prove the most affordable places to buy in. Bear in mind the property management costs of rental houses in your calculations.
Final thoughts on property investment
Due diligence is vital when making a significant purchase like a house. If you’re thinking of buying your first home, compare first time buyer mortgages to make sure you get the best deal for your needs. While it is challenging to work out where you want to live and the best places to invest in property, the detailed research above is helpful in identifying the areas with future potential in terms of career opportunities and growth.
Also, keep a close eye on the local market you are aiming to buy in to help you make informed decisions. While we hear of a falling market, there’s a lot of variation in prices depending on location, with many areas in the UK seeing little or no price changes.
Making future predictions is extremely difficult and the property market’s past performance is of limited value as a guide. While capital growth is always a consideration when investing in property, this can often only be achieved over the long term. Working out the best places to invest for you comes down to careful research!