Top Property Investment Hotspots for 2022

Posted by Salboy Ltd on 31st January 2022 -

Despite a year full of uncertainties due to the COVID-19 pandemic, the UK property market performed strongly throughout 2021. House prices have even risen at the fastest growth rate in 15 years, according to Halifax. While house price growth might slow down slightly in 2022, it’s still expected to be a strong year for property prices.

Additionally, after lockdown restrictions eased last summer, the rental market bounced back quickly. Demand has continued at high levels, and this is expected to remain the case in 2022 as well, especially in certain areas.

Following a record-breaking year, many are wondering what will be the best property investment hotspots in 2022. We looked at a wide range of research and data and used our own extensive experience and knowledge in the property industry to reveal our top 7 property investment hotspots for 2022.

1. Manchester

Manchester’s property market has been booming and has secured its spot as one of the top UK property investment hotspots. The city has earned its name the Northern Powerhouse. In recent years, Manchester has seen a significant amount of renovation and development and a rapidly growing economy and population. 

The thriving city has seen strong capital appreciation in recent years, leading house price growth in the North of England. Further growth is projected in the years to come as well. Savills predicts the North West, along with Yorkshire & The Humber, will see the strongest house price growth in the UK in 2022 at 4.5% and in the next five years with 18.8%.

Manchester was also ranked the fourth best city for buy-to-let investment in Aldermore’s 2021 Buy-to-Let City Tracker. The city has an average rental yield of 5.9%. Manchester also recorded the second highest annual house price growth in Zoopla’s November 2021 UK House Price Index with a 8.5% rise. 

While house price growth has been strong, prices and living costs are still much more affordable here. With strong housing demand, a number of new high-quality developments are coming forward to accommodate the rising population. There are a range of exciting, forward-thinking property developments to invest in across the city.

2. Bristol

Bristol was ranked the best UK city for buy-to-let investors on Aldermore’s 2021 Buy-to-Let City Tracker. It jumped an  impressive six places from number seven in the 2020 tracker, showing the growth the city has seen as a buy-to-let location in the past year alone.

One of the biggest selling points for landlords is the potential to earn capital gains here. According to data from Land Registry, the average house price has increased from £212,261 in 2010 to £348,543 in 2021. That equates to house prices having risen by 5.1% on average every year. Additionally, the average rental yield in Bristol is 4.6%.

Bristol is a university city, home to The University of Bristol and the University of West of England. And with strong employment prospects, including a growing tech hub, a young demographic continues to flock to the city, creating a large pool of tenants. 

In the city, about 27% of residents are estimated to be privately renting, which provides an exciting opportunity for buy-to-let investors.

3. London

London has traditionally been a leading global property investment hotspot. The capital has the highest house prices in the UK and lower rental yields, but house price growth has been strong in recent decades. 

During successive lockdowns due to the COVID-19 pandemic, many tenants left the capital, but certain areas of London have bounced back strongly in recent months and are forecast to see strong prospects in the years to come.

The areas that are expected to be the best property investment hotspots within the capital are locations with easy access to transport links and major development and regeneration projects coming forward. Less-developed areas often have more room for growth.

Barking and Dagenham has the lowest average house price within London. With strong transit links and a range of cultural offerings, it’s likely going to be a top property investment in 2022. 

Areas of Prime Central London have also seen growing demand in the rental market. With an uptick in demand and lack of supply, the Royal Borough of Kensington and Chelsea in particular is expected to have a strong year.

4. Nottingham

Over the past few years, Nottingham has made significant strides with its property investment market. One of the major benefits of the city is it’s more affordable than many of the other major cities across the UK, allowing investors the potential to earn higher rental yields.

In the Q3 2021 UK Rental Market Report by Zoopla, Nottingham recorded the second highest annual percentage change in rent out of the top UK cities with 8.3%. On top of that, it’s also seen the third highest annual house price growth in Zoopla’s UK House Price Index with 8.1%. 

This data collectively shows the growing prospects the city is seeing for buy-to-let investment, and it’s expected to be an even more exciting year for Nottingham’s property market.

5. Sheffield

Sheffield has become another one of the top property investment hotspots in the UK. With fantastic business opportunities bringing a plethora of professionals to the city, the area has a thriving rental market. Additionally, it’s a green city with the Peak District on its doorstep, which is particularly appealing post-COVID.

Within the Q3 2021 UK Rental Market Report by Zoopla, the average annual percentage change in rent across Sheffield was the fifth highest out of the top UK cities with 6.3%. 

On top of that, Sheffield recorded the fourth highest annual house price growth in Zoopla’s UK House Price Index with 8.0%. Savills also forecasts Yorkshire and The Humber, along with the North West, to see the strongest house price growth in the UK this year with a 4.5% increase and across the next five years with 18.8%.

6. Glasgow

Glasgow has often been in the shadow of Edinburgh. However, the second city in Scotland is emerging as a leading property investment hotspot. Rental growth and house prices are expected to continue increasing, especially as the city centre population is expected to double by 2030.

According to Zoopla, the annual percentage change in rent across Glasgow during Q3 2021 was the third highest out of the top UK cities with 7.2%. This data illustrates the increase in demand the city has seen. And the area is expected to see even more growth moving forward.

7. Birmingham

In recent years, Birmingham has become a top place for UK property investment. More exciting development and regeneration projects, including HS2, are coming to the city. As hosts of the 2022 Commonwealth Games, this will only further elevate the city this year and in the years to come.

At the same time, more businesses and startups are opening their doors in Birmingham. This is bringing more people to the city, and housing demand has never been higher in Birmingham. As the Powerhouse of the Midlands, the city is only expected to increase in demand further. 

With the prospects of increasing rental yields and house prices, more property investors will likely invest in this growing city in 2022.  

 

If you are planning to invest in property 2022, here’s a guide packed with top tips on how to invest in property. To discuss your options, get in touch with one of our friendly expert advisors.