Upcoming Property Hotspots in the UK for 2024

Upcoming Property Hotspots in the UK for 2024

As we move further into 2024, the UK property market is showing signs of dynamic change, offering fresh opportunities for astute investors and landlords. Identifying emerging hotspots early can significantly enhance the returns on your investments. Having closely observed the shifts in both the local Nottingham market and the wider UK landscape, I am excited to share insights into what I believe makes an area a property hotspot and to highlight what could be promising locations for the coming year. Whether you are looking to expand your portfolio or are just starting out, knowing where to direct your efforts can yield substantial rewards.

What Makes a Property Hotspot?

A property hotspot is often defined by a mix of elements that suggest strong investment prospects. These include economic development, infrastructural enhancements, and a rising demand for housing. Areas that are undergoing significant regeneration or are expected to see a boost in employment opportunities typically draw a high level of interest from tenants and buyers. Furthermore, government incentives for developers can play a pivotal role in transforming a region into an attractive investment zone. By monitoring these indicators, investors can strategically position themselves to capitalise on market movements.

Emerging Property Hotspots for 2024

As the UK navigates a post-pandemic economic recovery, several regions are standing out to me, as the next property hotspots. Here are a few areas to watch, including a special focus on Nottingham:

               •             Birmingham: Significant investment in infrastructure, including the HS2 high-speed rail project, is poised to boost Birmingham’s economic prospects. Forecasted to see an average property                                  price increase of 6.8% over the next year.

               •             Manchester: Ongoing developments in the media and digital sectors, especially around MediaCityUK. Rental demand remains high with yields up to 7% in some areas.

               •             Leeds: Fast-growing tech industry supported by a robust educational ecosystem. Properties in Leeds are currently undervalued but expected to rise due to increasing demand.

               •             Nottingham: Boosted by the growth in sectors such as digital media, biosciences, and fintech. Nottingham has seen a consistent rise in demand for both residential and commercial                                             properties, a strong student market helps support a projected rental yield of around 7.6%.

Source: Zoopla retail price index December 2023

How to work out Gross Yield:

  • If the property is already rented out, multiply the monthly rent by 12 to give you the annual rent. 
  • Then divide this figure by the cost of the property. If it's a property that you have not purchased yet, use the market valuation of the property or similar properties. 

Example: Rent per calendar month = £795, multiply that by 12 = £9540 annual rent, divide that by the purchase price of the property eg £160K = 0.059625 x 100 = 5.9625 so the gross yield would be 6%

How to work out Net Yield:

  • Start with the annual rental income as the gross yield
  • Calculate the associated expenses for the property such as utilities, maintenance, insurance, management fees etc
  • Subtract the expenses from your annual rental income to get your net income
  • Divide the net income by the property value.

Example: Annual rental income = £9540, less expenses of £1500 = £8040 this is your net income, divide this by the cost of the property £160K = 0.05025 x 100 so the net yield would be 5%

Considerations and Risks

Investing in emerging hotspots is not without its challenges. Investors should consider factors such as local economic stability, potential market saturation, and regulatory changes that could affect their investments. Additionally, understanding the importance of HMO licenses, Selective Licenses, and the implications of Article 4 directions is crucial for making informed investment choices and avoiding costly pitfalls.

In Conclusion

The UK property market is ripe with opportunities for those who know where to look. By staying informed about emerging trends and potential hotspots, you could strategically enhance your property investment portfolio. I encourage all readers to share their views and tips on other promising areas or insights into the regions discussed. Let’s continue the conversation and help each other stay ahead in the dynamic world of property investment.

As always, the above are my views and opinions only and you should always do your own research and take professional financial advice if appropriate. I am not a financial advisor. 

Diane Bialek

Diane's Nottinghamshire Property Blog

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