The UK property market has experienced significant changes in the wake of the COVID-19 pandemic. With rising house prices and shifting buyer preferences, it’s important to carefully consider where to invest in the UK property market in 2023.
According to a recently published annual report, which analyzes market activity, house prices, and rental growth, six major cities outside of London have emerged as attractive investment destinations. These cities, collectively referred to as the ‘Big Six,’ include Manchester, Birmingham, Bristol, Leeds, Glasgow, and Edinburgh.
These cities have shown promising growth and investment potential. Manchester, for example, has experienced a surge in property prices and is known for its vibrant economy and strong rental demand. Birmingham, Bristol, Leeds, Glasgow, and Edinburgh also offer their unique opportunities, such as thriving business sectors, cultural attractions, and increasing property values.
However, it’s important to conduct thorough research and consider various factors before making any investment decisions. Factors to consider include local market conditions, rental demand, employment opportunities, infrastructure development, and long-term growth prospects.
Consulting with local property experts, real estate agents, and financial advisors can provide valuable insights and guidance to help you make informed investment choices. By carefully assessing the market dynamics and potential of these cities, you can identify the best investment opportunities in the UK property market for 2023.
Summary of the Big Six Residential Report:
The residential property market in all six cities experienced growth in both house prices and rental rates throughout 2022. However, the sales market was affected by increased mortgage rates in the latter half of the year.
Remarkably, rental growth reached record levels, with an average increase of 15.8% across all six cities in 2022. Manchester stood out with the strongest rental growth, soaring by 22% during the year.
Manchester has consistently shown strong demand for property, making it the top performer among the six cities for the past three years. Its enduring popularity has contributed to its impressive rental growth and overall market performance.
According to the JLL Big Six Residential Report, Manchester and Birmingham are expected to experience the strongest house price and rental growth in the next five years. This growth is attributed to factors such as thriving job markets, large-scale regeneration projects, and their status within the government’s high-speed railway, HS2, which will make them attractive London commuter hubs.
The UK rental market is being transformed by various factors. Increased demand for city living post-pandemic, rising mortgage interest rates, and the end of the help-to-buy scheme have created a supply and demand imbalance, driving rental values to record levels across UK cities.
Investing in Manchester and Birmingham offers attractive prospects. Both cities provide new homes in prime city center locations with easy access to amenities, making them desirable for renters seeking quality accommodation in urban environments. Manchester’s strong investment potential is supported by its recent growing economy, high rental yields, and capital growth. Birmingham, still in the early stages of growth, has promising forecasts, boosted by events like the 2022 Commonwealth Games and a strong job market with major employers. The completion of HS2 will further enhance Birmingham’s connectivity to London, attracting more professionals.
Bristol sits at third place in the Big Six report. Bristol presents an excellent opportunity for property investors seeking long-term prospects. While property prices in the city surpass the UK national average, it is an appealing choice for investors due to its robust rental demand and high occupancy rates.
Analyzing housing market predictions in Bristol, it is anticipated that between 2023 and 2027, house prices will experience a notable growth of 17%, with rental values projected to increase by 18.2%. These promising forecasts indicate the potential for significant capital gains in the Bristol property market.
Consistently ranked as one of the best places to live in the UK, Bristol’s appeal is further enhanced by its thriving tech and creative sectors, making it particularly attractive to young professionals—an important demographic for rental properties. The city’s strong housing market, driven by demand from both buyers and renters, along with ample job opportunities, contributes to the continuous demand for housing in Bristol. Additionally, the fact that rents in London are unaffordable for many individuals further fuels the appeal of Bristol as an alternative.
In conclusion, Bristol’s favorable property market predictions, coupled with its reputation as a desirable place to live and work, position it as a compelling destination for property investors. The city’s potential for capital gains, consistent rental demand, and vibrant economic sectors make it a promising choice for those seeking long-term investments.
Summary:
The JLL report highlights the positive outlook for the UK property market outside of London, with Manchester and Birmingham leading the way in terms of rental growth. These cities offer attractive opportunities for investors seeking city center properties. Select Property, a company specializing in developments in high-performing cities, offers market-leading returns and comprehensive investment experiences in Manchester and Birmingham.
