Hot spots for property investment were fairly consistent before COVID-19 but like many other aspects of life, the pandemic has had a profound effect. While pre-pandemic hot investment opportunities were in places like Slough (close to Heathrow with the planned expansion) and Leeds where many businesses were relocating to, property investment strategies have now shifted.
Working from home policies and the changes to tenant’s priorities for their chosen location have shaped the Buy-to-Let market and although it is still strong, investors must be aware of which locations are now the best places to invest.
In 2020, there was a significant change in the type of areas and properties that tenants wanted to rent. Instead of city apartments that were close to work, more people were searching for property in rural areas with more space and a garden.
When assessing the best areas for investment, the factors that need to be considered are:
- The average total rent achievable
- Best short-term returns based on yield
- Best long-term return from projected house price increases
- Low volume of vacancies
- The percentage of the city that lives in rental property
Using these factors, Manchester is currently the best place to buy property to rent, mainly based on the increasing growth in the value of properties in areas outside of the city centre. It is worth noting that areas of the South East have become hotspots, with university cities Oxford and Cambridge climbing up the ranks.
The increase in demand for holiday accommodation
One property investment market that is thriving beyond expectations is holiday accommodation, with people who normally fly abroad for their holidays choosing UK staycations instead.
This change of holiday location has had a significant impact on property investment, with luxury lodges becoming an incredibly popular holiday choice. The other interesting trend is that many UK holidaymakers are looking for more remote locations, places where they can enjoy being outdoors and close to beauty spots.
Places in Scotland such as Dumfries are becoming a goldmine for building luxury holiday lodges. Dumfries offers access to Galloway Forest Park, which is a stunning expansive area that is ideal for hiking, cycling and watersports. Another benefit of the area is that in comparison to other parts of Scotland, it is easier to get to from parts of the UK outside of Scotland.
Holidaymakers also have the option of visiting Glasgow or Edinburgh a bit further afield, if they do fancy heading into the city for a day of shopping or sightseeing.
