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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:

UK's Top 10 Best and Worst Areas to Invest

“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:

UK's Top 10 Best and Worst Areas to Invest

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:

UK's Top 10 Best and Worst Areas to Invest

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.