Are you looking forward to investing in 2022? Well, the best cities to invest your money in as a landlord in 2022 are Bristol, Oxford, and Cambridge. These three cities are showing great potential judging by the increasing demand for homes and housing in the cities.
According to a recent Aldermore report, these are the three cities in the UK with great potential for landlords to invest in 2022. This report uses some indicators to predict the most lucrative and best cities for landlords in the UK.
Some of the indicators the report has used to rank these cities include:
- Long-term and short-term returns on house property
- The lowest number of vacancies proportion to the total housing stock
- Percentage of the city population in the rental market.
Aldermore Buy To Let City Tracker ranks Bristol, Oxford, and Cambridge, the best cities for landlords to invest in that order. Other cities and towns that make up the top ten include Manchester, Luton, London, Northampton, Brighton, Reading, and Norwich.
In the report, these cities are ranked based on the average rent per room in a month, the short-term yield for new-buy-to-let purchases, the size of the private rental market in the city, and the property price rise over the last ten years.
There are many reasons why those investing in the UK property market should look forward to these three cities in the UK. According to the head of distribution at Aldermore, Jon Cooper, the UK housing market is expected to witness steadfast growth in the next five years.
Some of these cities are already showing great potential, as seen by the increase in rental prices and demand for modern housing.
“The City Tracker is showing you how the UK housing market is rich with unique and diverse conditions that cut across different regions, which are all ripe for investment opportunities. As the country enters a post-Covid, this report should act as a clear indicator to landlords on where exactly they should be putting their money in 2022,” said Jon Copper.
‘’There is an emerging demand for a variety of housing units and property by renters. Landlords have to meet this demand as we enter 2022. Currently, private landlords are the major players in the housing market, supporting over 4.5 million households in major cities. The economy is slowly opening up, and the EPC rate is changing near 2025. This means it is the most suitable time for landlords to engage with their brokers on where exactly they would like to take their portfolios in the coming years,” added the head of mortgage distribution at Aldermore.
Bristol is now offering buy to let investors a long-term investment.
Buy to let investors in the UK have a place to turn their heads in 2022. Bristol is one of the cities in the country, showing great potential for the housing market. The city is taking a top spot in the most lucrative places to invest in the local housing market due to the long-term growth of the property values in the region.
Bristol also has the lowest number of long-term property vacancies out of the 50 cities in the UK. At least 27% of Bristol residents are estimated to be privately renting, creating a wide market.
Bristol’s property prices have grown by at least 5.1 % on average per annum since 2010. Luton is the only region in the UK that can match this price growth rate with 5.2% per year. This figure shows that any buy to let investor is likely to make a good return by selling their property after some years.
In the short term, the impact of the property price rise in most cities ranking high on the Tracker list is mixed. The average rent per room is 514 per month, showing an increase of 12% from last year. This figure makes Bristol the only city in the UK to command a rental value of more than £500 per month.
With Bristol attracting more investors in 2022, investors will have to spend more to invest in the market. The average property price in Bristol is currently £348,543. The likely returns on a purchase will be only 4.6%. This is way below the 5.9% average in the other 50 cities in the UK.
Luton joins the top 10 best cities to invest for the first time
Due to the improvement in long-term house prices in the UK, Luton is joining the list of the top 10 best places to invest for the first time. Luton has the strongest property price growth of any city in the UK, with 5.2% per year. It makes investing in Luton the most attractive long-term prospect for any buy to let investor.
London keeps coming down on the list.
London keeps falling on the list of top cities to invest in 2022, coming at position six. However, due to the city’s long-term capital outlook for property prices, it continues to be an attractive investment city in the county.
Scotland is also showing signs of a good investment.
Scotland can still be seen as a great competitive market for landlords in 2022. With Edinburgh and Glasgow all in the Top 20, it makes Scotland an attractive place for landlords investing for short-term benefits. Edinburgh boasts the highest percentage of private renters, resulting in one of the highest rental returns of all the cities at £546.
However, the city has the smallest number of vacant properties at 2.8%. Glasgow offers the highest average rent per room at £422, although it has the lowest proportion of vacant properties at 1.1%.
In this year, 2022, we should expect to let property investors look at some of the cities with promising futures in the housing market. The list provided by Aldermore is a clear indication of which cities in the UK will likely offer the greatest return for short-term and long-term property investors.
With the growth in property prices in the UK major cities, we expect 2022 to witness a major increase in supply in private rentals in most major cities. The best places for landlords to invest in 2022 will be Bristol, Cambridge, and Oxford.