9th May 2024
Best places to invest in property in the UK in 2024
It’s true what they say, when you’re buying a property, location is everything. From the changing average house prices of the area, to the local amenities available, buyers of every type need to consider both the investment value and lifestyle a location offers before starting to look at purchasing a property there. This goes for more than just typical investors looking to make a profit by renovating and reselling, renting out their property, or running a holiday let – changing property values is something that should concern traditional residential buyers too, no matter how far up the property ladder they are.
To help you make the right decisions in the long term, and secure a purchase that is as safe and profitable as possible, we’ve drawn on our industry expertise to create a list of the best places to invest in property in the UK. As we know, priorities regarding location can change depending on your motivations, so we’ve also split our recommendations by investor type. Whether you’re flipping houses, expanding your landlord portfolio, moving into holiday lets or buying your own home, read on to discover the best places to buy your investment property, as well as our top tips on what to look for if you have a location in mind that isn’t on our list.
What makes a location good for investing in property?
As any seasoned investor will tell you, there are no guarantees when it comes to investing in property and turning a profit. There are too many variables to consider and balance, but putting in the work early in the purchasing process and being as thorough as possible in your research is the best way to improve your chances of making a stable investment.
When researching whether or not an area will support a good real estate investment, there are five main elements to consider:
- Economic health – The first and most important indicator of how property values can change over time, the economic health of an area can make or break a property investment. Predictions on long-term economic growth for locations across the UK are readily available, and you can get a good idea of how a location’s economy is doing by checking the unemployment rate and seeing which industries the area supports.
- Transport infrastructure – How well connected an area is to its surroundings can transform the value of a property, especially if the location you’re considering is suburban or rural. Check on the transport links to local towns and cities; how long is the commute while driving, is the public transport reliable, affordable and time-efficient? All of these questions will matter to renters and buyers, so if you’re investing with the intention of re-selling or letting, they should matter to you too.
- Housing market – Unsurprisingly, areas which show promise are likely already attracting investors. It’s a fast-moving industry, and if there are opportunities for making a strong ROI there will be signs that people are investing in the area. In the housing market, these signs include properties selling quickly, a sustained increase in the average house price achieved in the area, and the development of new housing estates to support growth.
- Rental demand – Similar to keeping an eye on how the housing market is doing, a good indicator for investment (especially for those interested in buy-to-let properties) is how in-demand rental housing is. Locations with high rental yields also display a good potential for capital growth, with more people flocking to an area helping to boost the local economy.
- Amenities – Something which some investors may overlook if they aren’t looking to live in the property themselves, the amenities available around a property can make a big impact on its value. Pay attention to common requirements of your potential tenants or buyers, whether they’re families who want good schools and parks, students who want good recreation and leisure facilities, or tourists who want exciting hotspots and attractions.
Finding the best place to invest in property requires balancing the above indicators of value with your own personal circumstances and goals. If you’re buying for yourself, you may care less about rental demands and more about what amenities the area has to offer, while if you’re buying a HMO to rent out to young professionals, the transport infrastructure and economic health are likely to be your priorities. To find advice specific to your situation, skip ahead to the list of the best places to invest by buyer type which is most relevant to you below.
What to look for in an area as a property developer
If you’re a developer looking to make a profit by flipping houses, you’ll want to pay particular attention to the existing housing market in the area. As you’re likely to own the property for as short an amount of time as possible to keep running costs low, speed is of the essence. We recommend looking for areas where houses are selling quickly and house prices have been tracking up. If you can find a property for a low price, improve its value through renovations or extensions, and sell on to a new buyer, you’ve got a recipe for success.
In order to improve your chances of turning a strong profit, we also recommend taking a look at our supporting research blogs on how to increase the value of a property and how to calculate return on investment for renovation properties. With this knowledge to hand, you can make smarter decisions when looking for properties in your chosen area, whether that’s from our list or your own.
Best places to invest in property as a developer
With speedy sales paramount, the best locations to invest in property you intend to renovate and resell are typically those which have a fast-moving market. According to research performed by Zoopla, the average time it takes to sell a property in the UK is 34 days, with the North East and North West often falling below this average and selling within 30 days. The top five locations for achieving a fast sale include:
- Liverpool – 17 days on average – average sold price down 1% YoY
- Manchester – 21 days on average – average sold price down 1% YoY
- Salford – 23 days on average – average sold price down 11% YoY
- Basingstoke and Deane – 24 days on average – no YoY change in average sold price
- Waltham Forest – 24 days on average – average sold price up 5%
Of course, speed isn’t the only factor and you should also pay attention to how much these properties are selling for. Of the five locations identified, Waltham Forest in London saw the highest year-on-year increase in sold prices of 5%, while Liverpool, Manchester and Basingstoke all held largely steady.
Top tip: On average, you can achieve a faster property sale, with less risk of gazundering and fall throughs, by selling by auction instead of on the open market. The swift sales offered by the auction route mean you can open up your location searches considerably, focusing more on average sold prices than average sale speed. Don’t discount this metric altogether though, as it’s still a good indicator of housing demand.
What to look for in an area as a landlord
As a buy-to-let investor, your property-hunting priorities should be in line with where renters are and what they need. From an anecdotal perspective, this may include urban areas where rental demand is high, such as cities with universities and lots of graduate job opportunities, as these areas will naturally attract students and young working professionals who make up a large portion of the UK’s renting population. Once you’ve narrowed down your search to cities which fit this bill, you can start to apply a data-driven approach by calculating which locations have the highest rental yields.
Best places to invest in buy-to-let property
Always keeping a close eye on the property investment market, we’ve put together a comprehensive rental yield map for you to use to help you identify the best areas to invest in buy-to-let property. In our most recent update, we identified the following five cities as generating the strongest average yields:
- Bradford – rental yield 12.34%
- Manchester – rental yield 10.35%
- Newcastle – rental yield 10.29%
- Sunderland – rental yield 10.25%
- Swansea – rental yield 9.30%
Top tip: Our calculations for the rental yield map take into account the average property value for each area, but if you can purchase a property for under the market value, you can boost your earning potential. In our auctions, we regularly see properties across these high-yield areas which require renovation, making them perfect for buying cheap, updating and renting. Take a look through the lots available in our current auctions and filter by these top locations to start your investment off on the right foot.
What to look for in an area as a holiday let investor
An investment opportunity which brings with it very high potential earnings for those who aren’t deterred by hard work, the success of a holiday let depends heavily on the suitability of the location it’s in. In order to attract guests regularly, you’ll want to invest in a place that is attractive to tourists, whether rural areas with stunning natural beauty, or urban areas that are perfect for city breaks. Once you’ve found a location that holds sufficient appeal to your future guests, you’ll then need to make sure the investment itself is sound by calculating the holiday let yield. We’ve created a blog on how to accurately work out your potential holiday let income based on the property cost and annual income to help you test any property you find.
What to look for in an area as a residential buyer
The investment type which is most heavily influenced by personal choice, buying a property to live in yourself means that first and foremost, the location it’s in must suit your own individual circumstances. This means looking at locations that are within commuting distance to your work, have good schools if you have children, or are close by to friends and family if that’s important to you. Your own priorities will do most of the work in filtering down all the locations you may want to live in. After this, you can do further research to see which areas in your shortlist are likely to hold their value over a long period of time until you look to sell.
Forecasting the future worth of properties in a location is no small task, but there are reliable signals you can use to be more confident that your property will become more valuable over time. This includes paying close attention to the development of the area around the property, and investing in economically up-and-coming areas, such as those in the North of England where many technology and manufacturing industries are based.
Best places to buy a house to live in
One way to work out the best place to buy a home is by looking at affordability. In our research piece on the most and least affordable cities to buy property, we considered the average house prices and salaries in every city in England and Scotland, and found that the following five cities had the best price-to-income ratios for home buyers.
- Kingston upon Hull – price-to-income ratio 4.91
- Stoke-on-Trent – price-to-income ratio 5.30
- Aberdeen – price-to-income ratio 5.40
- Sunderland – price-to-income ratio 5.49
- Dundee – price-to-income ratio 5.68
Find an investment property at auction with SDL Property Auctions
Whatever your buyer position, find the right investment property in the best area for you at SDL Property Auctions by browsing through the lots in our online property auctions.
When the time comes to turn investment into profit, we can also help by valuing, listing and selling your property quickly and securely through auction. Learn why you should choose auctions for selling your investment property on our dedicated blog.