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Where to invest in the UK property market in 2024

Apr 25, 2024

Original article from Select Property - Best Places to Invest in UK Property 2024 | Select Property

The UK property market has seen unprecedented changes in recent years. In the years since the Covid pandemic, the UK economy has seen continually rising house prices and a change in buyer preferences as people shift priorities in ways to live, rent, and buy property for the long term. This has created an extremely robust rental market, with UK property hotspots across multiple cities offering high rental yields and excellent returns on property investment.

There are a number of cities offering investments in the UK, but which offers the best yields and the most opportunity for your portfolio? 

 

Analysing JLL’s Big Six Residential Report

Helping buyers navigate their property investment decisions, JLL published their Big Six Residential Report in February 2024, which compares market activity, house prices and rental growth across 6 UK cities outside of London for the Winter 2023/24 period. The ‘Big Six’ cities include ManchesterBirmingham, Bristol, Leeds, Glasgow, and Edinburgh.

 

Headlines of JLL’s Big Six Residential Report

 

  • Stock scarcity continued across all Big Six cities, causing a supply and demand imbalance and strong rental growth
  • Across Big Six new developments, rent increased by 8.8% in the year to December 2023
  • Manchester and Birmingham continue to offer the highest number of rental apartments across the Big Six
  • Investment across the Big Six cities (£1.1bn) fell just 5% year-on-year, compared to 20% UK-wide
  • New properties in the cities saw annual rental growth of over 8% in the year to December 2023
  • Currently, Birmingham has the highest annual rental growth (16.7%)

UK Cities 10-Year Sales Forecast (2023-2033)

City 10-year GVA growth forecast 10-year Working Population growth forecast
Manchester 21.1% 7.8%
Birmingham 14% 1.7%
Bristol 14.7% 1.4%
Leeds 14.8% 2.0%
Edinburgh 14.4% 8.5%
Glasgow 16.9% 5.8%

Source: JLL Big Six Residential Report, February 2024

What are the key factors transforming the UK rental market in 2024?

Key drivers for significant rental growth across UK cities include increased rental demand for city living in recent years, as well as market factors such as rising mortgage interest rates, increased property prices and the end of the help-to-buy scheme keeping prospective buyers in an already squeezed rental market. This supply and demand imbalance is driving rental values to record levels.

For investors, both Manchester and Birmingham are attractive propositions due to their attractive growth prospects. For renters, both cities offer a range of new homes in prime city centre locations with easy access to local amenities – including shopping, leisure and entertainment – making them desirable for those looking for quality rental homes in a city environment.

Sheffield is another up-and-coming UK property hotspot for 2024 and beyond. Reasons to invest in Sheffield include the northern city’s large student population and 20% capital growth forecast over the next five years. 

Attractive to investors looking for a lower capital entry point, Sheffield is a more affordable option than many other UK investment cities. Our latest Sheffield development, Velocity Tower, starts at just £168,000 with predicted ROI of 62% across five years. 

Where is the best place to invest in UK property in 2024? 

 

 

Why invest in Manchester?

Investing in Manchester property can be a great way to secure your financial future. There’s huge demand for Manchester property investment, thanks to the northern powerhouse’s status as one of the fastest-growing urban centres in the UK. With the city’s rapidly increasing population and attractive rental opportunities, it’s no wonder that global and domestic investors are choosing Manchester year after year.

Offering market-leading returns in the form of rental yields and strong capital growth, Manchester’s undersupplied rental property market underpins its strong investment potential. With an unrivalled lifestyle offering including a host of new venues, a growing talent pool, and a graduate retention rate of over 50%, Manchester’s growth is only just beginning.

Discover property investment opportunities at One Port Street, Manchester

Why invest in Birmingham?

Still at the start of an exciting new growth curve, now is the time to invest in Birmingham property. JLL previously cited the 2022 Commonwealth Games as a key driver for the city’s strong house price growth forecasts by 2027. Following the legacy of Manchester’s 2002 Games, from the torch being lit at the opening ceremony to one year later, house prices rose by 24%.

The job market in Birmingham is strong, with a number of major employers such as HSBC, Goldman Sachs and Jaguar Land Rover driving demand for homes in the area. This ‘North shoring’ trend of blue-chip employers choosing regional cities as an alternative to the capital is only set to increase as HS2 nears completion, cutting the commute time between Birmingham and London to just 49 minutes and bringing an estimated £10bn to the West Midlands economy over the next five years.

The city has seen a large influx of students due to its vibrant university scene, offering potential investors an opportunity to take advantage of the second-highest graduate retention rate (41%) outside of London across its five universities, including Russell Group, The University of Birmingham.

While our latest Birmingham development, Affinity Living Lancaster Wharf, is now officially sold out, contact us if you’re interested in secondary market opportunities for this game-changing residence, completing next year. 

Why invest in Sheffield?

Sheffield is truly one of the most exciting investment property hotspots in the competitive UK market. According to Property Data, rental returns from Sheffield investments reached up to 7.2% in some areas of the city in 2022-23. A combination of affordable property prices for investors and a strong rental market mean there’s plenty of opportunity here, in a city where huge employers including HSBC and IBM have established a base.

Thanks to two major universities (University of Sheffield and Sheffield Hallam University) there’s a thriving student population of around 67,000 in the city. Sheffield was named the second-fastest growing city economy in the UK, growing three times faster than London. TimeOut voted Sheffield as the second best city break destination in Europe in 2023.

Discover investments in Velocity Tower, Sheffield

JLL’s Big Six Residential Report paints an encouraging picture of the UK property market outside of London. Cities like Manchester, Birmingham and Sheffield stand out for rental growth opportunities over the coming years. With strong demand from both buyers and renters, these cities offer attractive opportunities for any property investors looking to add a city centre property to their portfolio.

At  Select Property, we only develop in the UK’s highest-performing cities. With investment opportunities currently available in Manchester and Sheffield, our market-leading returns and end-to-end investment experience make global investors choose Select Property year after year.  

Contact us to find out how UK property could work for you.

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