Where to invest in 2019: property hotspots revealed
With 2019 now well underway, it's time to look at where the best property investment hotspots might be in the year ahead – those locations offering the dream combo of strong rental yields and solid capital gains.
Despite the ongoing uncertainty caused by Brexit, there are still numerous opportunities out there for canny property investors to make good returns on their investment. Property remains a stable, reliable asset class – and has proved more profitable than stocks, shares and bonds in recent times. In times of uncertainty, people like certainty – and property investment fits that bracket. But where are the property hotspots to look out for in 2019?
Newcastle upon Tyne
The popular student city has long been a hotbed for those seeking a great night out, but in recent years it's also become increasingly appealing to investors. It's experienced rapid population growth since the turn of the new millennium – with the number of people residing in the city centre increasing by 112% between 2002 and 2015, according to think tank Centre for Cities. Significant regeneration has played a part in Newcastle's growing appeal, with a number of property and commercial developments being built, big improvements to the city centre and the construction of various new student accommodation blocks.
For those investors seeking a slice of the lucrative student market, there are few better places than Newcastle, which is home to a large and lively student population. In total, the city is home to approximately 50,000 students studying at two different universities (Northumbria University and Newcastle University). Roughly a sixth of Newcastle's population is made up by students, giving the city a very youthful vibe. In addition, young professionals and families are likely to be drawn by rental prices that are more affordable than other parts of the country. For investors, though, the relatively low initial investment costs (the current average price, according to Rightmove, is just over £200,000) means the chances of achieving strong rental yields are good. Equally, the city's strong price growth is great news for those with one eye on capital gains.
In times like these, investors will be looking for Brexit-proof investments – the opportunity to buy homes in areas where a profit can be made regardless of external factors such as political uncertainty. One such area is Liverpool, which has emerged from its post-industrial slumber to become one of the UK's most dynamic, exciting cities to live and work in. The city famous for The Beatles has experienced huge investment and regeneration in recent years, leading to a wide range of new developments, a thriving local economy and a strong jobs market which allows it to compete with other major northern cities such as Manchester, York and Leeds.
This, along with its unparalleled music scene, cultural heritage and fascinating history, makes it a popular location for a diverse range of tenants. What's more, its three universities and the Liverpool Institute of Performing Arts ensure it has a large student population, while the ongoing work to develop and regenerate the city's Baltic Triangle area – Liverpool's creative and digital quarter and a night-time hotspot – continues to draw creatives, startups and young professionals. Liverpool was one of only a handful of major cities to record faster growth in 2018 than in 2017, according to Hometrack, but its house prices are still the right side of affordable. This makes bagging a bargain a very realistic possibility. In fact, house prices in the city centre score very highly on affordability – with Rightmove putting the overall average asking price at just over £135,000. This, when coupled with strong and consistent demand from renters, ensures Liverpool is an ideal location for all kinds of investors.
The Midlands has plenty of locations for investors to get excited about in 2019, including Birmingham, Leicester and Nottingham – all thriving regional hubs with strong local economies, large student populations and excellent transport links. Coventry, though, is outdoing its better-known regional rivals. The city's been earmarked as one of the best places to invest in UK property in the year ahead, fuelled by strong yields and impressive house price growth. Demand and occupancy rates are both high, aided by a thriving student population. Coventry is home to two universities and around 50,000 students, while its status as the UK's City of Culture 2021 is putting it in the spotlight more than ever before.
For those interested in capital gains, research by HouseSimple recently revealed that house prices in Coventry have risen by 250% since 2000 – making it one of the best places in the UK in terms of price growth. The above are just three possible hotspots in 2019, with Newport, Swansea, Edinburgh and Northampton also expected to perform well, while Manchester – the beating heart of the Northern Powerhouse – is expected to further cement its position as an investment hub.