7 Reasons to Invest in Property in Nottingham and Where to Buy
7 Reasons to Invest in Property in Nottingham and Where to Buy
Undergoing substantial regeneration and economic growth, Nottingham is a city in its ascendency.
With strong capital growth potential, attractive rental yields and a sustainable student and growing young professional demographic, not to mention relatively affordable housing prices, now is a great time to invest in property in Nottingham.
Boasting high quality of life for its residents and with much of the UK within easy reach, here are 8 reasons why an investment property in Nottingham should be on your radar.
1. Strong Economic Prospects Mean a Strong Rental Market
Thanks to strong prospects and a rapidly growing economy, Nottingham is a particularly attractive UK city to invest in property. Ranking a top 10 city in the UK for growth, Nottingham’s metropolitan economy is the seventh-largest in the United Kingdom with a GDP of £24.9 billion and growing at a rate of 1.7%, outperforming Birmingham, Liverpool and Sheffield.
Not only is a strong and consistently growing economy making the city an attractive place to live, but job growth is higher than surrounding cities like Leicester and Derby. In the first three months of 2020, Nottingham was one of the top performers across the UK in terms of job creation, leading to an influx of people looking for rental property.
With a population of 781,151 and access to a wider workforce of 1.1 million within the recruitment catchment area, investors can expect lower vacancy rates and increasing rent prices, suggesting a good rate of return on a rental property.
Other good news for property investors is that Nottingham is home to a large young population. The 18 – 29 population stands at 28%, compared to 16% nationally meaning there’s plenty of opportunity to cater to this demographic often seeking rental accommodation.
Looking to the future, Nottingham’s economy is projected to be 14.8% larger by 2027 and will retain its title as the fastest growing economy across the East Midlands. (To put that growth figure perspective, Leicester, another one of the UK’s ascending economies will lag behind at 12.9 percent growth over the next decade). From a real estate investor’s point of view, this means any investment property is likely to bring good ROI over the next decade.
2. Nottingham is a Great Place to do Business
Nottingham’s thriving business scene continues to attract a wide range of companies to the city.
Over 50 nationally-recognised companies have selected Nottingham as their national headquarters, this includes the likes of Boots, Experian, E.ON and Capital One.
The city’s economic growth is also supported by high-net-worth industries, boosting its appeal among young professionals, who are likely to seek out rental property – good news for property investors.
The financial and business services sector employs over 126,000 people and is home to businesses such as HD decisions and TDX group. One of the UK’s administrative centres, companies like KPMG, Deloitte and Browne Jacobson have a significant presence, 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 and 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.
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.
4. Low House Prices and Growing Rental Yields
In 2019, property prices in Nottingham grew faster than any other UK city at 5.2% per year. Investors are likely to see the upward trend continue, and in 2020, Nottingham along with Edinburgh and Glasgow ranked as the three cities with the strongest prospects.
While house prices are increasing, it’s still an appealing time for investors as prices in the city are low compared to other major cities in the Midlands. The average property price in Nottingham is around £206,462 – a rise of 2% since 2019.
Nottingham’s rental market is also appealing. The city 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.
In 2018, Nottingham experienced the largest annual rental growth in the UK, increasing by 4.62%, compared to the national average of 0.97% (London’s is around 3%).
With low property prices and a rental growth four times that of the national average, it’s not hard to see why adding a property in Nottingham to your portfolio would be a good investment.
5. Strong Future Economic Growth Potential
When looking for a buy-to-let property it’s important to consider a city’s future growth potential. Under a period of intense economic regeneration, things are looking exciting for Nottingham.
Currently under construction is a £2 billion redevelopment of the city centre’s Southside. The 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. £1 billion has already been invested in the city’s infrastructure, including one of the greenest bus networks in the UK and light rail trams for congestion-free commuting and transportation throughout the city.
Guildhall Place is a 2.4-acre mixed-use redevelopment site in a prime location in Nottingham’s City Centre. While still in the concept phase, the development site is likely to include Grade A office buildings, university facilities, student accommodation, a hotel and conference centre.
The city is also set to benefit from the HS2 high speed rail network. With the East Midlands Hub base planned for Toton on the outskirts of the city, journey times to London will be further reduced and the rest of the UK brought even closer.
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 investors thanks to rising prices, new rental opportunities and capital growth returns.
6. A Thriving Student Rental Market Thanks to Two World-Class Universities
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 the city, 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 additional rental opportunities.
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 hours 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 and HS2 is set to bring the rest of the UK in closer reach.
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.
A growing foodie scene, sporting and cultural events and independent shops make Nottingham a great location for city living. As well as a UNESCO City of Literature, Nottingham holds the title as the Greenest UK City with plenty of nature nearby, including Robin Hood’s famous Sherwood Forest and the Peak District right on its doorstep.
In addition, the £29.4 million restoration of Nottingham Castle is set to restore this historic landmark to former glory. The economic advantages of this project are clear, too, expected to bring an additional £90 million to Nottingham’s economy over the next decade.
Which Areas in Nottingham are Best for Property Investment?
Nottingham City Centre
As the city centre continues to undergo economic redevelopment, property in the area is catching the eye of investors. With its prime location and a wide selection of houses and flats on offer, now is a great time to invest.
Attractive areas such 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. Investors can expect rental yields of around 5% and average property prices of around £135,410.
Located in Nottingham’s north-east, 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, it’s 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 £198,479.
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.
Average property prices in Beeston are £220,000
This higher-end residential area is popular for its parks, sports grounds and water activities surrounding the River Trent. There’s convenient access to the city thanks to cycle and bus routes. Average property prices in the area are some of the highest at £346,172
7 miles south-west 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 is easily connected to Nottingham centre by tram.
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 £187,820.
From economic growth to strong industries to a thriving rental market, there are plenty of reasons to consider Nottingham for your property investment. If you’re thinking about purchasing a buy-to-let property in Nottingham, contact us today.