What Are The Best UK Cities To Invest In Property?

If you are looking for the best UK cities to invest in property, it is important to understand the distinct differences in attitudes between tenants in different areas. After all, preferences for rental properties are not solely determined by factors such as age, income, or the number of occupants: each city’s residents harbor distinct preferences and expectations. Through our Smart Investing investigation into UK tenants residing in key urban centers, we have discerned unique attitudes across four English cities: Manchester, Birmingham, Sheffield, and London.

What Do Tenants Expect?

Before delving into city-specific nuances, let’s revisit the overarching expectations held by tenants across the nation. Having surveyed 600 respondents, the Smart Investing research identified the most and least valued features by calculating the proportion of favorable and unfavorable responses to each one. Notably, respondents expressed a high regard for energy efficiency, garden space, and socialising lounge areas as their top three priorities, respectively. Conversely, amenities such as concierge services, co-working spaces, and gym facilities ranked lowest in importance. But how would this change based on location, and what does this tell us about the best UK cities to invest in property?

Manchester

When it comes to finding the best UK cities to invest in property, Manchester should certainly be on your radar. This northern powerhouse city is experiencing excellent growth, with forecasts suggesting that this is set to continue as JLL predicts a cumulative price growth of 16.5% from 2024 to 2027. This capital growth will be accompanied by rental value increases, with the same publication forecasting 14% cumulative rental price growth over the same period, making Manchester one of the best UK cities to invest in property. But what do Mancunians want, and how can you invest smartly to provide these tenants with their ideal home?

Residents of Manchester were notably dissatisfied with their property management, with nearly 30% expressing discontent regarding this facet of their rental arrangements. This dissatisfaction encompassed challenges in reaching building managers, feeling unheard by staff, and encountering unresolved issues within their properties or communal spaces. This trend extended across all surveyed regions, with dissatisfaction levels ranging from 19% to 30%. This underscores a crucial consideration for investors: thoroughly assess the property management and customer service of letting agents before listing your property with them.

Furthermore, it’s noteworthy that Manchester residents placed a high importance on pet friendliness, with 76% of respondents in Manchester indicating that this feature was either ‘somewhat’ or ‘very important’ to them. For landlords, particularly those in Manchester, it’s essential to deliberate on pet friendliness policies before property investment. To attract pet owners, focusing on freehold houses rather than leasehold apartments, which may have restrictive head leases prohibiting pets, could prove advantageous.

Birmingham

Next on our list is Birmingham, which is similarly forecast to experience huge growth across both the sales and lettings sectors. JLL predicts that Birmingham property prices will experience a cumulative growth of 17% from 2024 to 2027, and rental price growth of 13%, showcasing just how prosperous the city is for budding investors. It’s no wonder Birmingham is forecast to experience such growth – the city is experiencing huge swathes of investment, with the West Midlands drawing the highest proportion of foreign direct investment outside of London, securing 181 FDI projects from 2022/3, marking a remarkable 171%surge compared to the preceding year. Paired with growing job opportunities, increasing tenant demand and a range of ongoing infrastructure developments, there are plenty of reasons to invest in the second city.

When it comes to what Birmingham residents want from their rental unit, it seems that many are

dissatisfied with the available job opportunities in their area, with 28% expressing some level of discontent. This revelation is surprising given Birmingham’s status as the UK’s second-largest city, highlighting the importance of strategically investing in buy-to-let properties near areas undergoing commercial revitalisation. Locations such as Digbeth and Longbridge, poised for exceptional growth, present particularly promising investment opportunities. 

It’s noteworthy that EV charging stations rank among the least important features for Brummies, despite the implementation of the Birmingham Clean Air Zone, which incentivises electric vehicle adoption. This trend may be attributed to Birmingham’s robust infrastructure, placing it in the top 20% of local authorities for EV charging facilities. While access to charging points remains beneficial, the significance of this amenity varies greatly based on location, a crucial consideration for landlords.

Sheffield

Sheffield is solidifying its position as a prime buy-to-let destination thanks to its market-leading rental yields, accessible entry point for investment, and robust five-year growth forecasts. With consistent capital appreciation witnessed over the past half-decade, analysts anticipate a 20% surge in Sheffield property values in the coming five years, presenting an opportune moment for investment. The city boasts a diverse economic landscape, bolstered by the presence of major corporate entities like Siemens, HSBC, Boeing, and IBM. This not only fuels substantial career prospects but also draws affluent professionals seeking enduring rental accommodations.

Sheffield residents generally align with those in our other surveyed cities regarding the importance of various features. However, they exhibit lower satisfaction levels with local amenities, bars, and restaurants. In Sheffield, 35% of respondents expressed some level of dissatisfaction with these establishments, which is 7% higher than the overall average across all cities.

Regarding local amenities, 31% of Sheffield residents were dissatisfied, compared to 26% of all survey participants. Therefore, property investors should prioritize evaluating the quality of local amenities, bars, and restaurants, as tenants near these facilities or in redevelopment areas may be willing to pay higher rents.

Additionally, Sheffield residents showed the lowest satisfaction levels with the variety of stores and services near their rental units, with 25% expressing some degree of dissatisfaction. This dissatisfaction with local amenities, bars, and restaurants reflects a desire for more than just basic conveniences like corner shops, gyms, and pharmacies near their homes – this is something investors in Sheffield must be aware of and target to boost their tenant’s satisfaction.

London

Last but certainly not least is London. The London property market’s allure to investors is primarily driven by its sustained stability, encompassing various factors that make investing in London compelling. The city’s historical resilience, consistent demand, economic diversity, and legal security contribute to its stability and attractiveness for investors. According to the UK property agency Hamptons, the rental market in London is experiencing significant growth, with rents increasing by 16% compared to September of the previous year. This surge in rental prices mirrors the strong demand for housing in the city, positioning it as a lucrative market for buy-to-let investments. 

Despite London’s reputation for offering everything within reach and being the quintessential ten-minute city, our research reveals that Londoners are more prone to feeling dissatisfied with their local bars and restaurants compared to the average. Thirty percent of Londoners expressed some level of dissatisfaction with the bars and restaurants in their vicinity, underscoring the demand for leisure and nightlife amenities, even in bustling metropolises.

Moreover, Londoners exhibited a heightened importance placed on parking, with 76% of residents in the capital indicating that parking was either ‘somewhat’ or ‘very important’ to them, in contrast to 72% of our overall surveyed audience. This inclination likely stems from the staggering cost associated with parking in London, where the average car parking space fetches £219,000, nearly equivalent to the average property price in the rest of the UK, highlighting the intense demand for parking spaces in the city. A simple search on Rightmove reveals that out of the nearly 30,000 rental units available in London, only 27% include parking, compared to 34% in Birmingham and 50% in Manchester – so, if you’re looking for a buy to let unit in London, parking ought to be on your agenda.

Explore the best UK cities to invest in property with Centrick

With a wealth of properties available for buy to let investors, Centrick are your ideal partners in property. To explore our available developments, click here – alternatively, you can download our full Smart Investing guide using the form below to access all of our exclusive investor insights.