Is property still a good investment 2023 UK?
Where a buy-to-let is located significantly impacts its value and often determines how successful the investment is.
Top-performing buy-to-lets are usually found in areas with high demand for rental properties, and high rental yields are achieved. Some factors that can contribute to this include a shortage of rental properties in the area, an area’s growth, or its status as a highly sought-after area to live.
If you’re poised to invest in property but unsure about the timing, this article aims to provide valuable insights.
We’ll explore whether 2023 is a good time to invest and identify this year’s most lucrative property investment hotspots.
Is 2023 a good year to invest in property?
Today’s economic landscape and rental market paint a conflicting picture for potential property investors.
On the one hand, we’re in the midst of a cost-of-living crisis and interest rates are sky-high, factors that could reduce investment returns. On the other hand, the UK is also experiencing a housing shortage, which has increased demand for rental properties and the price of rent to unprecedented levels.
According to the most recent Zoopla Rental Market Report, rents for new lets are up 10.5 per cent over the year.
Add to this the fact that house prices have begun to fall, which Lloyds predict will persist until 2025.
These factors suggest that 2023 could be a good time to pick up investment properties at more affordable prices.
Which part of the UK is best for property investment?
A growing number of UK property investors are setting their sights on properties in the north of England rather than the south, deeming the north a more financially rewarding part of the country to invest.
Let’s find out why this is.
- Lower property prices – Property prices are generally considerably lower in the north of England compared to the south. This makes the entry point for investment more accessible and makes it easier to achieve higher rental yields.
- High demand – Many northern cities are currently undergoing regeneration and economic growth. This growth, combined with the current housing crisis, means demand for rental properties is higher than ever in the north.
- Higher rental yields – The combination of low entry costs and high rental prices makes it easier for property investors to achieve high rental yields in the north. According to Zoopla, the North East comes out on top when comparing average gross rental yields – with an average rental yield of 7.2 per cent.
- Capital growth – Because northern towns and cities are increasingly subject to infrastructure investment, urban regeneration, and commercial development, investing in property in the North boasts promising capital growth prospects in the long term.
Where is the best place to buy property in the UK 2023?
When considering the best place to buy investment property in the UK in 2023, there are many different factors to consider; these include rental yields, tenant demand, economic growth, local amenities, and employment opportunities.
Currently, some of the most lucrative places to invest in property in the UK are:
Average price of a buy-to-let property – £133,000
Average monthly rent – £763
Average gross yield – 6.89%
Average price of a buy-to-let property – £83,000
Average monthly rent – £582
Average gross yield – 8.39%
Average price of a buy-to-let property – £127,000
Average monthly rent – £764
Average gross yield – 7.21%
Average price of a buy-to-let property – £82,000
Average monthly rent – £530
Average gross yield – 7.73%
Average price of a buy-to-let property – £139,500
Average monthly rent – £898
Average gross yield – 7.73%
(Figures taken from Zoopla.)
Other promising locations for property investment UK include Manchester, Leeds, Birmingham, Dundee, Middlesborough, Blackburn, and Sheffield.
It’s useful to note that landlords managing student houses in multiple occupation (HMOs) achieve some of the highest rental yields. Property investors open to investing in student accommodation may wish to consider northern university cities when deciding where to invest.
At The Mistoria Group, we help investors find and secure attractive investment property opportunities in the UK. For help or advice with property investment, call us on 0800 500 3015, email email@example.com, or complete our online contact form with your enquiry and contact details.