After the turbulence of 2020, 2021 held many possibilities, especially for the UK property market. From the initial Stamp Duty holiday deadline, to yet another national lockdown, there have been many hurdles to overcome throughout the year.
However, the momentum from the post-lockdown boom, combined with an economic recovery, has seen more activity in the UK property market than ever before, which is set to continue into 2022 and beyond.
Combined with the returning demand for major city centres, SevenCapital, a leading UK property development and investment company, has used a combination of research from Zoopla, JLL and Knight Frank to identify the top 10 investment locations for the new year:
Birmingham
The UK’s second city has long been a top contender for buy-to-let investors, with Birmingham’s growing population and affordability making for a potentially lucrative investment.
While Birmingham has already seen a 17% rise in property prices over the past five years, the city’s expanding finance sector is set to bolster both the economy and the property market. With the likes of Goldman Sachs, PwC and HSBC bringing thousands of jobs and young professionals to the city, Birmingham is expected to see up to 19.5% price growth by 2025, along with a 12% rise in rents.
Average price: £214,696
Average rental yield: 6.56%
Price growth in five years: 17.44%
Manchester
Manchester is not only leading the way for capital growth in the North, but this economic powerhouse is also set to be a pivotal UK investment hotspot for 2022. Home to MediaCityUK, Manchester is forecasting 1.2% economic growth by the end of 2021 thanks to its collection of multinational enterprises.
The city’s wealth of employment opportunities is a significant contributor to Manchester’s strong population, which is currently sitting at around two million. With students making up over 100,000 of the city’s population, Manchester is forecasting up to 12.5% rental growth by 2025.
Average price: £208,792
Average rental yield: 6.53%
Price growth in five years: 20.69%
Derby
The key to a successful investment often lies in emerging locations. While Derby is a leading city within the East Midlands, it’s exciting future is putting it amongst the likes of Birmingham and Manchester for property investment opportunities.
As well as being at the centre of the UK, Derby is home to many manufacturing giants, including Rolls Royce and Bombardier. Drawing more than 124,000 students and young professionals to the city, Derby’s growing population is set to push property values by up to 24% in the coming years.
Average price: £222,910
Average rental yield: 4.20%
Price growth in five years: 11.37%
Nottingham
While Nottingham is considerably more affordable than other leading cities in the UK, its future long-term growth is set to be one of the strongest in the country. The city’s popularity amongst a growing graduate pool is seeing some Nottingham postcodes reach 9%, such as NG1 and NG7.
With two leading universities in central Nottingham and an average property price of just £230,522, Nottingham offers investors the potential for both capital appreciation and competitive rents in 2022.
Average price: £230,522
Average rental yield: 4.92%
Price growth in five years: 19.26%
Newcastle
As well as being a top 10 investment location, Newcastle also ranks eighth in the UK by population. Despite the growing demand for property, this northern city has one of the most affordable average property prices on the list, making it an attractive prospect for investors.
The affordability of Newcastle has been attributed to challenges surrounding capital growth in the past five years, but with an average rental yield of 5.23%, the combination of affordable prices and high yields is positioning Newcastle as a key investment location for 2022.
Average price: £215,355
Average rental yield: 5.23%
Price growth in five years: 8.26%
Leeds
Leeds is a serious contender for 2022 investment hotspots, especially with 73% of the city’s 800,000 strong population currently renting property. For those looking for consistent tenant demand, Leeds is one to consider.
While the city has seen less capital growth in the past five in comparison to other locations, Yorkshire as a whole is expected to see over 28% price increases in the next five years, driven by a number of new developments across the region.
Average price: £232,617
Average rental yield: 5.76%
Price growth in five years: 15.30%
Edinburgh
Over the last decade, property in Edinburgh has seen exceptional price growth, which has long been making the city an attractive investment opportunity. In the last five years alone, Edinburgh has seen price increases of almost 18%, which are set to be strengthened by a growing economy.
Edinburgh’s economic strategy exclusively aims to continue promoting this major city as the most productive in the UK, with these ambitions expected to push property prices by 24.4% by 2025.
Average price: £316,791
Average rental yield: 5.35%
Price growth in five years: 17.65%
Bracknell
It’s no secret that the South East has had one of – if not – the best performing property markets in the UK over the past 18 months. Driven by the ‘race for space’, home sellers in the region were able to profit £141,538 on average during the pandemic.
Bracknell is a leading commuter town in Berkshire, and has long been a significant contributor to the region’s success. With a £770 million regeneration scheme underway, and a chronic undersupply of contemporary property, Bracknell is set to be an investment hotspot in 2022, especially with 19.1% price growth forecasted by 2025.
Average price: £377,945
Average rental yield: 5.47%
Price growth in five years: 2.96%
Sheffield
This time last year Sheffield was at the start of its property cycle, and after a strong 12 months, we are now beginning to see the potential of this thriving city.
Driven by a £480 million shopping district, Sheffield’s property market is experiencing more activity than ever before, pushing average yields in central postcodes as high as 7%. After the city emerged from lockdown and saw a 20% influx in sales, this momentum is expected to continue into 2022.
Average price: £215,203
Average rental yield: 4.45%
Price growth in five years: 14.54%
Liverpool
Boasting the lowest average property price on the list, Liverpool’s impressive affordability has long been attracting investors to the market. While the city has seen less capital growth than its northern counterparts, this is expected to change in the coming years.
In the next four years alone, JLL is forecasting 28% growth in property prices across the city, and with certain postcodes known for delivering 10% rental yields, it’s no surprise that Liverpool is set to be an investment hotspot for 2022.
Average price: £188,948
Average rental yield: 4.82%
Price growth in five years: 17.03%
