NEWS: The Fastest Growing Property Price Locations in the UK

23-February-2022

23-February-2022 15:45

in News

by Sam Hodgson

NEWS: The Fastest Growing Property Price Locations in the UK

Buy to let properties have two main forms of investment return:

Rental income
And growth in value

The right rental property can pay off your buy to let mortgage repayments with the rental income, while also serving as a long-term growth investment.

But the major decision that prospective landlords face is where to buy.

You might want to buy in an area you’re familiar with, that’s near to your own home, or somewhere with great rental yield like a University town.

But how much of a factor is the growth of your house price? Is it worth sacrificing rental yield and practicality for the prospect of greater long term returns when you come to sell?

New research from Rightmove reveals the areas in the UK with the highest and lower property price rises over the last ten years.

We look at the data, consider the effects of house price increases for buy to let investments, and think about what the future of the UK’s regional property market could look like in 2022 and beyond:

What does the research show?
How important is the value of your buy to let property?
What are the best property investment areas for the future?

What does the research show?

Rightmove’s research compares asking prices from January 2012 to 2022 and reflects the difference as a percentage.

The areas with the greatest property price growth are below:

BTL Property Hotspots

And the areas with the least amount of property growth are below:

BTL Property Locations

There has been a clear divide between the North and South of England in terms of property price rises over the last decade.

Almost all of the booming property locations have been in the South East or South West, while the more stagnant markets have been predominantly in the North East and North West.

How important is the value of your buy to let property?

When you consider the monetary value of this discrepancy, it highlights the value of getting your buy to let property location right.

Comparing the 6.2% price rises in Middlesbrough to Margate’s 102.5% is the most dramatic example to use, but it represents a whopping 96.3% difference in investment return, which averages out to greater return of 9.63% per year.

But is this divide set to continue?

What are the best property investment areas for the future?

Zoopla’s most recent market research for projected house price rises in the UK suggest that, over the next 5 years, the Northern regions will be playing catch up.

They estimate the North West to see 18.8% growth and the North East to see 17.6%.

On the other hand, they expect the London property market to grow just 5.6%, and the South East to grow only 10.4% - below the national predicted average of 13.1%.

So, why the change?

One big factor is: life after lockdown.

The country has gone through dramatic economic changes, particularly in regards to commuting and work from home culture.

With less city workers needing to buy up homes close to their offices, combined with people spending more time in their houses and home offices, there’s a greater demand for space: indoors and outdoors.

And there’s generally more space the more north you look.

For more detail on property market predictions, read this: UK Property Hotspots for Expats in 2022 - Top Locations to Consider

And, don't forget about affordability

With northern areas potentially offering solid growth returns in the future, it’s also worth noting that it’s easier to get on the buy to let property market due to the lower average house prices in the region.