7 Reasons to Invest in Property in Nottingham and Where to Buy
In this article, we take a look at why property investment in Nottingham should be on your radar.
Nottingham is a city in its ascendency! Boasting high quality of life for its residents, undergoing substantial regeneration and leveraging its prime strategic positioning that puts much of the UK within easy reach.
With strong capital growth potential, attractive rental yields and a sustainable student and growing young professional demographic, Nottingham is an up-and-coming city investors should take note of.
1. A Rebounding Economy
While most UK cities are still struggling to regain their pre-pandemic levels of economic activity, Nottingham, along with Bristol, has emerged as an exception to this trend. That is to say, their economies have returned to pre-pandemic growth levels.
Nottingham’s economic activity has been bolstered by significant growth in health services, professional services and the transportation sector. According to Ernst & Young, between 2022 – 2025, GVA growth in the Nottingham city region is predicted to be close to 2.7%. This is slightly above the UK predicted average of 2.5% with its employment growth set to be at 1.2%.
Across the UK, the cost of living crisis is expected to lead to falling economic activity. Therefore making it a difficult year for consumers and businesses across the East Midlands. However, almost two-thirds of business leaders in the East Midlands are confident they’ll have more success in 2023 than they did in what proved to be a tough 2022. In addition, half of those surveyed by Lloyds Bank expect revenues to grow.
With Nottingham’s economy beginning to bounce back, job creation and economic opportunity is expected to have a positive impact on the housing market and spur demand for rental properties.
Incoming Investment in Nottingham
Incoming investment is helping to transform the city, even in challenging times. Nottingham City Council has secured over £10 million from the Government’s UK Shared Prosperity Fund. The investment will support local residents, businesses and communities, skills training, employment and productivity growth.
In March 2023, the East Midlands was shortlisted as one of eight areas to host new investment zones. Investment zones in the East Midlands would be a good opportunity to bring more well-paid jobs to the area. This would certainly include Nottingham as well.
Population and Workforce
With a population of 807,000 and access to a wider workforce of 1.1 million within the recruitment catchment area, Nottingham presents investors with a strong market of young professionals that are a prime market for the rental sector.
More good news for property investors is that Nottingham is home to a large young population. 80% of Nottingham’s population is under the age of 40. The 18 – 29 population stands at 28%, compared to the national average of 16%. Meaning there are plenty of opportunities to cater to this demographic that is often seeking rental accommodation.
2. Nottingham Business: Thriving & Inviting
Nottingham’s thriving business scene continues to attract a wide range of companies to the city.
Organisations like Boots have been one of Nottingham’s biggest and most renowned employers to date. And in addition, Games Workshop, which reported revenues of £2.69 billion in its latest figures, takes its place among Nottinghamshire’s largest companies.
Other companies that have selected Nottingham as their national headquarters, include:
- Experian
- E.ON
- Capital One
- Center Parcs
- Speedo
- Wilkos
- Paul Smith
Nottingham’s financial and business services sector employs over 126,000 people. It is also home to companies such as HD Decisions and TDX group. One of the UK’s administrative centres, organisations like KPMG, Deloitte and Browne Jacobson have a significant presence. Therefore boosting the city’s appeal to companies of similar stature.
At the cutting edge of life sciences and health innovation, Nottingham is known for its expertise in medical devices (the MRI scanner was invented in Nottingham), biotechnology and healthcare.
The life sciences sector employs 91,000 people and is further enhanced by the NHS Trust. As well as cutting-edge research from two of the UK’s leading universities covering cancer research, child health and clinical neurosciences.
With close to 114,000 people working in areas such as aerospace, electronics, R&D and logistics, companies such as Rolls Royce, Reckitt Benckiser, Greene Tweed, Midlands Aerospace, Bombardier and Romax Technology have bases in Nottingham thanks to the city’s world-class talent pool.
With a range of high-profile employers, Nottingham presents investors with a stable and growing rental market. That is to say, a huge potential for great returns in the coming years.
3. Nottingham is Home to a Thriving Startup Scene
A city with innovation and imagination at its heart, Nottingham is home to a strong creative industry. In addition to fashion design, film, gaming and TV production, a strong business support ecosystem, access to a talent pipeline and affordable commercial rents make it a hub for startups and scaleups.
The city’s Creative Quarter is the heart of its digital and creative industry, combining coworking spaces, business ecosystems, retail, restaurant and living spaces in an innovative and forward-focused hub.
Opportunities for collaboration, talent and the resources to set up businesses with ease as well as affordability are a few of the reasons for Nottingham’s increased popularity with young professionals.
The city’s economic growth is also supported by high-net-worth industries. Therefore boosting its appeal among young professionals, who are likely to seek out rental property. Which is good news for property investment Nottingham.
Another positive fact is that these businesses tend to collaborate with Nottingham’s Universities, which makes them even more inviting to the student population, which now exceeds 60,000 people.
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4. An Appealing Housing Market
In 2022, the growth in house prices in Nottingham over the last 12 months was among the fastest in the UK, rising by 13% in the year to the end of November 2022. This put Nottingham in the top 20 cities and towns with the strongest annual percentage increases in house prices (coming in at number 18).
In 2023, housing demand in Nottingham remains strong despite an eventful year in 2022. Despite the cost of living crisis, rising mortgage rates and fears that the UK could dip into a recession, in 2023, properties are still selling without too much of a drop in price.
According to Plumplot, the average price of a property in the Nottingham area is £242,000. Over the last 12 months (March 2022 – February 2023), the average price of a property increased by £12,600 (5%). Most properties sold in the £150,000 – £200,000 price range, with 3,619 (24.6%) properties sold.
Real estate company Savills expects UK property values to fall by 10% in 2023. However, they predict house prices will start to recover from 2024 as interest rates and affordability pressures ease. Meaning the average house price could be more than £22,000 higher in five years’ time.
Nottingham Rental Market
Nottingham is currently suffering from a lack of housing supply, pushing up rents. The majority of new developments in recent years have focused on the student market and this has resulted in a chronic lack of new developments in the city centre for other residents and young professionals. While not an ideal situation for renters, with rents on the rise, it’s encouraging for investors.
Nottingham’s rental market is faring well. Despite landlords increasing rent due to rising mortgages, demand for rental property remains high. Nottingham, average rents reached £851 per calendar month, up 11.9%.
Putting these figures into perspective, in 2022, the average rent for a new letting in the UK increased by £117 per month to £1,078 per calendar month. This price increase is, in part, driven by a chronic demand and supply imbalance, with the stock of homes for rent down 38% in comparison to the 5-year average and down 4% in comparison to November 2021.
5. A Thriving Student Rental Market
Nottingham is home to two world-class universities – The University of Nottingham and Nottingham Trent. Known worldwide for their excellence in research, the institutions have helped to power the city’s expertise in healthcare, manufacturing and technology.
The popularity of these two universities has led to a thriving student scene. There are over 60,000 students in Nottingham, many of whom are from overseas. A quarter of the University of Nottingham’s students are from abroad.
Student rental property is in high demand and purchasing a buy-to-let property focused on renting to students can be a lucrative investment. Private investors have been attracted by high yields and low vacancy rates, and the fact that many of these students stay on in the city after graduation, contributing a pipeline of talent to the city’s economy and providing opportunities for a rental investment property in Nottingham.
For those considering student property investment, Nottingham has a few prime hotspots on offer, including Lenton, Dunkirk and Nottingham City Centre.
6. Strong Future Growth Potential
When looking for a buy-to-let property in Nottingham it’s important to consider a city’s future growth potential. Under a period of intense economic regeneration, things are looking exciting for the city, making it a prime time to invest in Nottingham.
Some of the investment projects underway include:
The Southside Regeneration
2023 will see the continuing regeneration of Nottingham’s Southside. The £2 billion project comprises a City Hub college campus, Grade A office space, and a refurbished shopping complex, as well as the redevelopment of the central library and bus station.
New Central Library
By the end of 2023, the new Central Library, part of the bus station and car park complex, will be completed. The library will feature a high-quality children’s library with an immersive storytelling room, extensive book collection and comfortable areas to sit and read, as well as a café and exhibition and performance space.
Broad Marsh Green Heart
Once completed, the redevelopment of the Broadmarsh area will drastically improve the city centre. The Green Heart will see an area the size of the City Ground football pitch turned into a green urban park, complete with wetland and marsh areas to bring nature into the heart of the city centre.
The Island Quarter
The Island Quarter is set to bring 1,600 new homes, 20 restaurants, cafes and bars and 6,000 jobs across 26 acres. A recently completed part of the project, “1 The Island Quarter” is a £1.4 billion mixed-use development that includes a canal-level performance space, restaurants and bars and event space for private hire and a rooftop.
These development projects are set to have a positive impact across the board – business growth, an influx of young professionals and increased confidence for property investment in Nottingham, thanks to rising prices, new rental opportunities and capital growth returns.
7. High Quality of Life for Residents
A thriving transportation hub thanks to its location in the heart of the East Midlands, Nottingham boasts excellent transportation links and accessibility.
Easy access to North-South connections via the M1 and A1, and 77% of the UK population within an hour’s drive make it easy for businesses to serve a wide range of customers. Rail connections put London St Pancras just 1 hour 40 minutes away.
The city has two major airports on its doorstep and is home to the UK’s largest and busiest freight airport. 89% of England and Wales is accessible within a four-hour truck drive time, which has transformed the city into the heart of the UK’s logistics networks. 41,000 people are employed by the logistics and transportation sector, and leading operators have made Nottingham their UK base.
Nottingham is also a dynamic city, abundant in history and personality, with a particularly affluent city centre, it’s not hard to see the appeal of living in Nottingham. As well as a UNESCO City of Literature, Nottingham holds the title of the Greenest UK City with plenty of nature nearby, including Robin Hood’s famous Sherwood Forest and the Peak District right on its doorstep.
Which Areas are Best for Property Investment in Nottingham?
When it comes to narrowing down a location for your investment property, here are some up and coming areas in Nottingham to consider:
1. Nottingham City Centre
As the city centre continues to undergo economic redevelopment, property in the area is catching the eye of investors. With a wide selection of houses and flats on offer, now is a great time to invest.
Attractive areas such as the Creative Quarter and Park Estate will remain popular with young professionals. The city centre is also an ideal location for students attending Nottingham Trent University, providing investors with a sustainable rental market.
Properties in Nottingham City Centre held steady with an overall average price of £229,999 over the last year.
2. Mapperley, Nottingham
Located in Nottingham’s northeast, Mapperley is a popular residential area. It’s home to a range of shops, cafes and pubs, as well as a shopping centre which serves the local area. Mapperley Park is a designated nature area, meaning greenery is likely to remain.
Conveniently located, Mapperly is six miles from the M1, a 20-mile drive to East Midlands Airport and the mainline station in the city centre provides a regular service to London St.Pancras.
This family suburb is home to houses in the higher pricing brackets, with the average property purchase price around £246,732.
3. Beeston
A residential and commercial centre, Beeston has Nottingham Science Park close by that features Grade A offices set within a landscaped campus-style environment as well as good quality office space and accommodation.
The area is popular with families due to its proximity to the M1 and 10-minute link by train to the city centre as well as buses and trams.
According to Rightmove, average property prices in Beeston were £276,487 over the past year.
4. West Bridgford
West Bridgford is located in the South of the Nottinghamshire area, and houses some of the biggest sporting attractions in the region and contains a number of gorgeous areas and houses.
This higher-end residential area is popular for its parks and water activities surrounding the River Trent. There’s convenient access to the city thanks to cycle and bus routes.With an array of independent shops and facilities, West Bridgford offers residents shopping close to home as well as restaurants to enjoy.
Average property prices in the area are some of the highest in Nottingham and amount to £389,624 over the past year. This is 8% up on the previous year and 15% up on the 2020 peak of £338,491.
5. Long Eaton
7 miles southwest of Nottingham, Long Eaton is a town on the Nottingham border. A popular commuter location, it sits on the M1 and features a reliable bus and train route connecting the East Midlands area. And it is additionally easily connected to Nottingham centre by tram.
Long Eaton is a good value area for Nottingham property prices. A market, supermarkets and retail park alongside pubs, restaurants, cafes and a cinema mean there is plenty of amenities for renters or property buyers.
In the last year, average property prices sold for an average price of £236,16.
Is Nottingham a Good Area to Invest in Property?
According to Track Capital’s 2023 report, Nottingham ranked 7th out of all towns and cities in the UK in terms of rental yields. The average rental yields for Nottingham properties is 5.94%, well above the East Midlands average of 4.1%.
Buy-to-let investors can find good value in a Nottingham investment, but you’ll need to check out what rental demand and likely rents are possible in the particular areas you’re looking at. With relatively low property prices and rental growth, Nottingham property investment could be a good addition to your portfolio.
Is Nottingham an up and Coming City?
In 2023, The Telegraph ranked Nottingham the ‘ the most underrated in England’. Labeled a hidden gem, the city has constantly reinvented itself over the years. Especially with investment transforming post-industrial areas into vibrant modern-day cultural scenes.
With one of the youngest average ages among the UK’s core cities, aided by two well-respected universities and a city-wide plan to be carbon-neutral by 2028, Nottingham is one of the most forward-looking in the country. Therefore making it well-equipped to continue growing as an important UK city economy.
The Island Quarter development, one of the largest of its kind in Europe and the potential of the Broad Marsh area means more businesses and young professionals, as well as property investors, are looking to Nottingham for investment property.
Conclusion
From economic growth to strong industries to student accommodation investment opportunities, there are plenty of reasons to consider property investment in Nottingham. If you’re looking to buy property, Nottingham can be a great destination. Contact us today to find out more.
