As we shift our gaze towards another promising and fruitful year, UK property investment continues to grow in popularity, particularly in the rental market. Rising demand for rental properties coupled with an unfaltering supply opens up lucrative opportunities for seasoned and new investors alike. Simply put, a high rental yield translates into an impressive return on investment.

But with numerous cities and areas to choose from, pinpointing lucrative opportunities can seem overwhelming. Fear not, this blog reveals the top 4 UK cities primed for investment in 2023.

Current State of the Rental Market

The rental market is experiencing a juxtaposition of high demand and low supply, thanks largely to the cost of living crisis and increasing interest rates, which is causing more people to put their homeownership dreams on hold. Wages are failing to keep up with rising rents, leading to growing affordability concerns.

Another notable trend is the resurgence of city centres as both professionals and students return to city living post-pandemic. There is an evident increase in demand for 1 and 2-bedroom properties as tenants look to downsize to more affordable spaces.

While landlords are feeling the pinch due to increasing costs, including mortgage interest rates, some regions still offer attractive yields. Property prices are forecasted to drop by an estimated 10% this year, hinting at potential investment opportunities.

Birmingham: An Investment Hub

Birmingham, the second-largest city in the UK, is humming with potential, hosting a rapidly growing tech and financial sector. Extensive ongoing regeneration efforts have rejuvenated the city centre, making Birmingham one of the best cities to live in.

Home to five universities, Birmingham caters to a large student population. The HS2 railway investment promises faster commute times which will inevitably boost the city’s appeal. Over the last year, the average property price in Birmingham was £256,167, illustrating stable growth.

Nottingham: A City of Opportunities

Nottingham is an educational hub, hosting two universities, the University of Nottingham and Nottingham Trent. It also houses the largest teaching hospital in the UK, the Queen’s Medical Centre, and serves as the headquarters for major companies such as Boots, EON and Experian.

The city has an extensive tram network that ensures easy access to its amenities. The overall average property price over the last year in Nottingham was £240,864, showing consistent growth.

Manchester: Economic Powerhouse

Regarded as the largest economic region next to London, Manchester is growing swiftly in the tech and media sectors, drawing interest from young professionals. It ranks as one of the largest university cities in the UK, reflecting a massive student population.

Property prices here are up to 40% cheaper than those in London, making it a desirable area for potential investors. The overall average property price in Manchester over the last year was £284,922 – an 11% rise from the 2020 peak.

Newcastle: A Creative and Tech Hub

Newcastle is home to a thriving student population and is an emerging centre for the creative and tech sectors. Newcastle offers comparatively lower property prices with the North East’s house prices being 47% less than the UK average.

The overall average property of £204,311 over the last year, though slightly down from the previous year, illustrates a steady growth trajectory and showcases its potential for future investment.

Conclusion

When it comes to UK property investment, 2023 is shaping up to be an exciting year. Despite challenges like the cost of living crisis, the rental market is rich with opportunities for investors who are focused and ready to seize them. Cities like Birmingham, Nottingham, Manchester, and Newcastle are bursting with growth and promise, making them standout locations to consider for property investment. So why not gear up and ride the investment wave to make the most out of the upcoming prospects? The perfect time to invest might be just around the corner.

For a free consultation visit Max Property Finance.