Top Property Investment Hotspots

Top Property Investment Hotspots In The Uk. The Barclays UK Property Predictor reveals property prices across the UK will rise by 6.1% in the next five years, bringing the average property value to almost £300,000

Over the next five years, high employment rates, growth in private housing market levels and an increase in rates of average earnings will contribute to rising property prices across the UK. The South is expected to see the largest annual property price increase over this period; however property investors are looking north of the property hubs of London and the South East for good value for money and income stability. Over a third (38%) of high net worth investors (HNWI) looking to purchase property in northern regions think that property prices are going to rise there, with over a quarter (27%) who plan to purchase citing strong rental income as a reason to invest there.

The Midlands has the fourth highest expected annual price increase in the UK at 1.22%, behind London, the East of England and the South East. Warwick in the West Midlands has emerged as one of the top 20 areas of highest growth, with an expected annual increase of 5.31%, driven by higher-than-average earning rates and the highest level of business start-up rates in the region. Scotland has the fifth highest expected annual price increase at 1.15%. East Renfrewshire makes the top 20 areas of highest growth with an expected annual increase of 4.37%, with its large proportion of highly qualified residents expected to drive up prices.

The research reveals that younger HNWIs will be a key driver in the growth of the UK property market over the next three-to-five years. The millennial investors surveyed have 41% of their investment portfolio tied up in property, compared to 23% amongst those aged over 55.  They are also more bullish in their approach to investing in bricks and mortar with 75% intending to increase the percentage of their portfolio in property over the next three-to-five years, compared to just 10% of over 55s.

Millennial investors are also more likely to own more than one property, compared to over 55s, and are reaping the financial rewards of multiple property ownership with almost half (48%) of their annual income generated from rent. Those under 55 (18-54 year olds) who are planning to buy new property are more likely to take advantage of a buy-to-let mortgage product to fund future property purchases, 23% compared to just 7% of over 55s.

Buy-to-let investment on the rise

Investors are leaning on buy-to-let to fuel their property portfolios, despite the recent changes to buy-to-let tax. Higher value investors are seeking to maximize returns through property purchases, with nearly two-thirds (65%) of those looking to buy doing so for rental income. Sixty-two per cent of those with rental properties expect the proportion of the income they receive from rent to increase over the next three-to-five years, with half predicting it will rise by up to 20%.

Barclays UK Property Predictor UK Price Increase

Region Expected average annual increase (%) Overall % increase (2017-2021)
London 2.27% 11.88%
East 1.81% 9.38%
South East 1.69% 8.74%
East Midlands 1.30% 6.67%
West Midlands 1.15% 5.88%
Scotland 1.15% 5.88%
South West 1.04% 5.31%
North East 0.88% 4.48%
North West 0.79% 4.01%
Yorkshire and The Humber 0.71% 3.60%
Northern Ireland 0.60% 3.04%
Wales 0.57% 2.88%

The average overall UK price increase over the 2017-2021 period is expected to be 1.31% per annum. The overall increase expected over the 2017-2021 period is expected to be 6.1%.

Current UK average house price is £274,000 (Source: Barclays Local Insights). Based on an expected increase of 6.1%, by 2021 the average value of a UK house will be nearly £300k (£290, 714).

Barclays UK Property Predictor UK – Areas

Region Area % increase Overall % increase (2017-2021)
London Richmond upon Thames 6.82% 39.10%
East St Albans 6.78% 38.80%
East Three Rivers 6.12% 34.60%
London Camden 6.02% 33.90%
London Westminster 5.70% 31.90%
South West Cotswold 5.67% 31.80%
London Wandsworth 5.56% 31.10%
East Uttlesford 5.38% 30.00%
South East Mole Valley 5.35% 29.80%
West Midlands Warwick 5.31% 29.50%
East Midlands South Northamptonshire 5.27% 29.30%
East Hertsmere 5.08% 28.10%
South East Waverley 5.03% 27.80%
South West East Dorset 4.96% 27.40%
South East Elmbridge 4.79% 26.40%
East Midlands Rushcliffe 4.65% 25.50%
South East Windsor and Maidenhead 4.54% 24.90%
Scotland East Renfrewshire 4.37% 23.80%
South East Hart 4.29% 23.40%
West Midlands Stratford-on-Avon 4.23% 23.00%

Source: Guarantee My Rent