Posted on 29th August 2023
Property investment is a tried-and-tested way to generate passive income. And right now, in the UK, it’s an opportune time to get involved.
Despite ongoing concerns such as the cost-of-living crisis, political uncertainty, and the projected average 10% decrease in house prices in 2023, this is actually a highly advantageous moment to consider property investment.
Why? Because the current market reflects a drop in house prices overall, making it a suitable time for those who can afford to invest. Moreover, this situation is coupled with a thriving rental market, presenting the potential for significant returns.
So, where are the best places to invest in UK property and make money in 2023?
Here are a few of the top contenders:
Liverpool is a city on the rise, with a thriving economy and a growing population. This makes it a great place to invest in property, as there is a strong demand for rental accommodation.
This is due to many factors, including:
- High price growth: Liverpool has seen impressive capital appreciation recently, with Zoopla reporting a 1.4% increase in house prices in the last year. According to the latest from the Land Registry, there was also a 39.03% increase in prices since 2018. Across the next five years, Liverpool and the North West are expected to see prices further increase by 11.7% – the highest level of price growth in the country.
- Relatively low prices: Liverpool is still considered to be a relatively affordable city, which makes it an attractive option for investors. In the last 12 months, the average property price in Liverpool stands at £193,369 according to RWinvest.
- Regeneration: Liverpool is undergoing significant regeneration, with several new developments underway. Creating many new jobs and opportunities, this has driven demand for housing even further.
- Young population: Liverpool has a young and growing population, which is another positive factor for property investors. Young people are more likely to rent than own their own homes, which creates a steady demand for rental accommodation.
- Rising rental prices: Rental prices in Liverpool are rising, meaning investors can expect to generate good rental income from their properties.
- High gross yield: Liverpool has a high level of return, which means that investors can expect to earn a good return on their investment. Currently, the gross yield in Liverpool is around 6.78%.
With a time-honoured reputation as a property hotspot, Manchester is one of the most sought-after investment locations in the UK.
This is due to a number of factors, including:
- Strong house price growth: Manchester consistently sees some of the highest price growth in the country. In the last 12 months, prices rose by 1.6%. Overall, prices in the city have increased by almost 80% throughout the previous decade. Like Liverpool, Manchester is also expected to see house prices grow by 11.7% by 2027, significantly higher than the national average of 6.2%.
- Regeneration: Manchester has undergone significant regeneration in recent years, with a number of new developments underway. Again, as well as boosting the economy, this has only furthered the demand for new housing. More information can be found on the official Manchester City council housing data resource.
- Rental demand: Manchester is a popular city for students and young professionals, which creates a steady demand for rental accommodation.
- High rental yields: Manchester has high rental yields, which means that investors can expect to earn a good return on their investment. The gross rental yield in Manchester is around 8.23% on average.
- Affordability: Manchester is still considered to be an affordable city, which makes it an attractive option for investors. In the last 12 months, Manchester prices have seen an average of around £250,716. Compared to London prices (which can get as high as £726,467), Manchester provides a more affordable option without sacrificing solid returns.
Also known as ‘the UK’s Second City’, Birmingham is a popular investment spot for a wide variety of investors. Offering excellent long-term capital growth, this is an attractive option for those looking to secure a quality retirement fund.
There are a number of factors that are driving the growth of the Birmingham property market.
- Strong economic growth: Birmingham is a major financial hub with a diverse range of businesses and industries. This creates a steady demand for housing, both for owner-occupiers and renters. Over the last 12 months, the city has seen a 2% positive change in prices. Over the next five years, Birmingham is expected to see an average price growth of 8.9 – the third highest in the UK, just behind Scotland and the North West.
- Regeneration: Birmingham is undergoing a major regeneration, with a number of new developments underway. This is creating new jobs and opportunities, which is driving demand for housing.
- Proximity to London: Birmingham is well-connected to London, making it a good option for investors who are looking to rent out their property to professionals.
- Affordability: The average sold price for a property in Birmingham in the last 12 months is around £247,000. This is around £39,000 cheaper than the national average recorded in May (£286,000).
These are just a few of the many great places to invest in UK property in 2023. If you are considering investing in property, it is essential to do your research and choose a location that is right for you. Property investors often research the financials with tools such as the RWinvest Buy to Let mortgage calculator.
Property investment is a marathon, not a race – seeing the best returns can take some time.
This is why it’s vital to consider areas with the most potent levels of capital appreciation, particularly if you want to pursue a long-term investment strategy. Currently, the North West – Liverpool and Manchester – has the highest estimated growth in the UK. So, if you want to make money and get the most out of property investment, looking into these areas may see the most rewards.