UK’s Top 10 Best and Worst Areas to Invest – 2021 Update
While investing in bricks and mortar is as reliable an investment as ever, securing the best income is reliant on a range of factors. One of the key things is buying a property in an area that offers the best rental yields and potential for capital growth. Find out what are UK’s top 10 best and worst areas to invest.
Although London has long been seen as a solid choice, with prices rising at eye-watering rates savvy investors are looking further afield to achieve the best returns. But knowing just where to pick can be tricky, involving a lot of research.
At Aspen Woolf, we consider it our responsibility to monitor the trends and conditions within the property industry, in order to give our clients the best recommendations. Here’s what our founder and director, Oliver Ramsden had to say recently about the current state of the market:
“The UK property market stayed strong in 2016 despite a turbulent year, with confidence remaining in the buy-to-let sector in particular.
Rental growth increased but at a slower rate than 2015; this was to be expected however, notably due to the unexpected Brexit result stalling market movement for a short period.
House prices should start to increase above the 3% mark again in 2017, especially in buy-to-let ‘hotspots’ which we have identified.”
By analysing market activity and data from recent years, we have identified the following parts of the UK as being the top 10 buy-to-let hotspots in 2017:
The 10 Best Postcode Areas to Invest
| Postcode Area | Area | Average value of property | No. of sales in the last 12 months | Current average asking price | Current average rental price (pcm) | Buy to let yield (%) |
|---|---|---|---|---|---|---|
| M | Manchester | £177,686 | 11625 | £202,484 | £1,339 | 7.94 |
| CF | Cardiff | £187,337 | 12356 | £173,850 | £1,054 | 7.28 |
| LS | Leeds | £225,551 | 10339 | £204,072 | £1,217 | 7.16 |
| L | Liverpool | £164,590 | 6859 | £175,641 | £1,027 | 7.02 |
| WS | Walsall | £195,383 | 4995 | £193,944 | £1,106 | 6.84 |
| NE | Newcastle upon Tyne | £184,224 | 12850 | £173,666 | £873 | 6.03 |
| S | Sheffield | £194,673 | 6693 | £180,126 | £888 | 5.92 |
| G | Glasgow | £182,716 | 16454 | £165,046 | £786 | 5.71 |
| B | Birmingham | £189,898 | 10396 | £203,990 | £921 | 5.42 |
| SR | Sunderland | £134,891 | 2282 | £133,028 | £587 | 5.3 |
As well as knowing the best places to invest, it is also worth being aware of the postcodes you might want to avoid. For example, April 2016 saw rents peak in the London letting market, showing signs of the market in the UK capital weakening.
“We forecast this trend to continue, especially within prime central London, hence have identified West Central London, or the WC postcode, as the top UK location to avoid in 2017,”
Here are the areas that our research has shown to be the top 10 worst performing buy-to-let areas in the country:
The 10 Worst Postcode Areas to Invest
| Postcode Area | Area | Average value of property | No. of sales in the last 12 months | Current average asking price | Current average rental price (pcm) | Buy to let yield (%) |
|---|---|---|---|---|---|---|
| WC | Western Central London | £936,660 | Not available | £1,486,208 | £2,877 | 2.32 |
| BR | Bromley | £547,661 | 4121 | £633,812 | £1,287 | 2.44 |
| LD | Llandrindod Wells | £215,894 | 556 | £247,659 | £514 | 2.49 |
| WD | Watford | £563,462 | 3147 | £678,837 | £1,452 | 2.57 |
| SG | Stevenage | £414,561 | 5972 | £476,816 | £1,053 | 2.65 |
| HR | Hereford | £267,871 | 2217 | £306,503 | £692 | 2.71 |
| AL | St Albans | £595,386 | 3271 | £667,922 | £1,521 | 2.73 |
| CB | Cambridge | £416,239 | 5322 | £446,454 | £1,020 | 2.74 |
| EX | Exeter | £290,770 | 9139 | £315,125 | £736 | 2.8 |
| WR | Worcester | £281,073 | 4254 | £288,729 | £674 | 2.8 |
By knowing the UK’s top 10 best and worst areas to invest in the UK, and taking into account the worst performers too, you can decide which area presents the best prospects for your future investment. To help narrow down the best possible investment in the city of your choice, it is always worth asking a knowledgeable agent to go through their top recommendation to maximise your returns.
What is happening in 2021?
Whether the record-breaking prices and transaction levels will maintain momentum through to 2021 or not we have yet to see, however, what is certain is, either way, the market will continue to move. For investors, the question will be, now more so than ever due to shifts in priorities changing the landscape of demand across the UK, where are the top cities and towns to invest in 2021?
1.Birmingham
Average Price: £202,162 Average Rental Yield: 5.4% Price Growth in Five Years: 14.2%
2.Manchester
Average Price: £242,311 Average Rental Yield: 5.37% Price Growth in Five Years: 15.76%
3.Liverpool
Average Price: £186,527 Average Rental Yield: 5.30% Price Growth in Five Years: 8.45%
4.Nottingham
Average Price: £214,435 Average Rental Yield: 4.66% Price Growth in Five Years: 16.92%
5.Newcastle
Average Price: £198,307 Average Rental Yield: 6.5% Price Growth in Five Years: 6.2%
6.Leeds
Average Price: £268,037 Average Rental Yield: 5.1% Price Growth in Five Years: 9.4%
7.Edinburgh
Average Price: £333,691 Average Rental Yield: 4.19% Price Growth in Five Years: 12.33%
8.Bracknell
Average Price: £383,788 Average Rental Yield: 3.98% Price Growth in Five Years: 11.02%
9.Sheffield
Average Price: £209,405 Average Rental Yield: 5% Price Growth in Five Years: 11.41%
10.Glasgow
Average Price: £194,545 Average Rental Yield: 5.2% Price Growth in Five Years: 15.05%
If you found this article helpful, you may also be interested in reading our latest article –The Best Place to Buy Property in the UK in 2021
If you’re ready to start your investment journey, you take a look at our range of property investments here.