For investors looking at the East Midlands for property investment opportunities, Leicester stands out as one of the top buy-to-let destinations they should be focusing on. Leicester has emerged as an increasingly lucrative market in recent years, offering strong capital growth, rental demand, and long-term returns. In this article, we’ll explore why buy-to-let property in Leicester promises investors an attractive entry point into a high-yielding, strong rental market.
Leicester’s Property Market
While not the biggest city in the East Midlands, Leicester has developed into a vibrant, diverse city with a population exceeding 370,000. The city is one of the most multicultural in the whole of the UK and boasts a range of exciting and innovative industries. These offerings are making Leicester an increasingly in-demand city from tenants, who are eager to be a part of this city’s unique cultural makeup.
The city gained renewed global recognition in 2016 when Leicester City Football Club won the Premier League against 5,000-to-1 odds. This inspiring moment increased awareness of Leicester to millions of people, but its ongoing development, economic potential, and lifestyle appeal are driving continued demand in the city.
Between 2011 and 2021, Leicester’s population grew by 12%, outpacing many UK cities. Its reputation as one of the best places to live in the UK, coupled with significant economic and infrastructural growth, is creating strong demand for rental accommodation across the city.
For investors, this represents a golden opportunity to enter a high-demand market that offers both short-term rental returns and long-term capital appreciation.
Why Invest in Leicester?
Property investment in Leicester stands out as an excellent choice to investors for several reasons.
Competitive Property Prices and Solid Yields
One of Leicester’s most attractive features is its more affordable buy-to-let property prices, when compared to the rest of the UK. The average property price in Leicester is £228,000. For comparison, the average price of a property in Birmingham is £236,000 and Manchester’s average price is £247,000. Moreover, the average rental yield stands at an impressive 5.77% across the city, according to Zoopla, with some areas reaching highs of 7%.
These healthy returns make Leicester stand out as an excellent choice for both new and seasoned buy-to-let investors.
A Thriving Student Market
Leicester also boasts a healthy student scene. The city has an estimated student population of 40,000 and is home to two major universities, De Montfort University and the University of Leicester. This creates a strong and consistent demand for student accommodation in the city, particularly in areas close to the campuses and the city centre.
The student property market in Leicester provides high occupancy rates and stable rental income throughout the academic year. Leicester buy-to-let investors can capitalise on this trend and ensure strong returns.
Strong and Diverse Economy
Leicester also has one of the strongest economies in the UK, with strength across various sectors. Manufacturing, retail, tourism, and education all provide excellent stimulus to the local economy, and emerging sectors such as finance and SaaS (Software-as-a-Service) are helping to further diversify the city’s economy. The city has seen positive employment growth as a result, and continues to attract investment into key industries.
Leicester is also undergoing ambitious regeneration initiatives. The Leicester Waterside development is transforming previously underused land into a vibrant new neighbourhood with homes, commercial spaces, and green areas. This is boosting the appeal of the city to renters and private investment, with the regeneration opening up new opportunities. This is priming Leicester for strong capital growth in the coming years, which buy-to-let investors can capitalise on.
Excellent Transport and Infrastructure
Leicester’s transport infrastructure provides residents with ease of access to the majority of the city. Well connected by bus and cycle routes, residents can make their way across the city with relative ease. Leicester’s Railway Station offers direct links to London in just over an hour and quick access to Midland neighbours Nottingham and Birmingham, highlighting Leicester’s potential as a location for commuters.
Regeneration efforts are being focused on further improving the state of Leicester’s transport options. The Leicester Railway Station is set to undergo a £22 million regeneration, introducing upgraded passenger facilities and creating a new pedestrian plaza. St Margaret’s Bus Station is also undergoing a £12.2 million regeneration, which is helping further connect bus routes throughout the city.
Rich History and Culture
Leicester is steeped in history and cultural significance. It’s one of the most culturally diverse cities in the UK and has a vibrant community atmosphere. It is also the final resting place of King Richard III, whose remains were famously discovered under a car park in 2012.
The city also has a strong sporting presence. While Leicester City FC may be the most popular sporting institution in the city, Leicester is also home to the Rugby Union team Leicester Tigers and the Leicestershire County Cricket Club, among others.
Leicester’s cultural and historical significance is a huge driver of tourism to the city, creating potential for short-term let opportunities to be successful.
Best Areas for Leicester Property Investment
Here are some of the best areas to consider for property investment in Leicester.
City Centre
Leicester city centre is the hub of the city. Ideal for student lets and young professionals, Leicester buy-to-let investors can capitalise on the city centre’s excellent access to the universities, nightlife, shopping, and cultural venues. Properties in the city centre experience the highest demand and rental yields, boasting an average rental yield of between 4.3-7.3% and average asking property price ranging from £134,696 to £293,521.
Westcoates
Westcoates is just outside of the city centre and offers an excellent range of properties. Located in the LE3 postcode, the area is within walking distance of the city centre and the Leicester Railway Station, making an ideal location for young working professionals who are either commuters or work within the city. Furthermore, the area is in close proximity to De Montfort University, making it a prime location for student lets. LE3’s average property price is £259,091 and the average rental yield is 4.8%.
Oadby
The LE2 area covers a large area of the city centre and its outer boroughs, including Oadby. It is a popular location for students, due to its short distance from the University of Leicester.
LE2 residents have excellent access to many of the city’s green spaces, including Clarendon Park and Abbey Park. Leicester City FC’s King Power Stadium, the Leicester Tigers’ Rugby Stadium, and the Leicestershire County Cricket Club can also be located in this area.
The average asking price for the area is £293,521 and the average rental yield is 4.3%
Why Leicester is a Standout Option for Property Investment
Leicester’s affordable property prices, high rental yields, growing student population, strong economy, and excellent connectivity, Leicester is a compelling location for buy-to-let investors. The city’s ongoing regeneration and cultural richness only add to its unique appeal, helping it stand out from other cities in the UK.
Contact Advantage Investment today for a personalised consultation to help you find opportunities ideally suited to you. Advantage Investment can help you capitalise on the best market opportunities available in the UK.
