Location Location Location

Macro-location refers to the broadest form of geographical placement and describes the region in which a property is situated, such as a city, county, state, province, or a larger geographical area.

Factors to consider whilst looking at macro-location will include:

• Strong capital growth potential
• High levels of regeneration, which is a good sign of a growing housing market.
• Good transport links and infrastructure

While the macro-location focuses on the big picture, the micro-location zooms in to the immediate surroundings of a property or building. At this lower level, the main considerations are:

• High rental income and strong rental yields.
• Accessibility to public transportation
• Proximity to local amenities such as parks, shopping, restaurant and entertainment
• Safe and secure neighborhoods
• Proximity to good schools

For the purpose of this article, I will be focusing on the macro-location.

According to Aldermore’s 2022 Buy to Let City tracker, the top 5 spots rated as best city for buy to let investment are Manchester, London, Bristol, Cambridge and Peterborough.

These were based on five different factors: average total rent, the best short-term returns through yield, long-term return through house price growth over the past ten years, the lowest number of vacancies as a proportion of total housing stock and the percentage of the city population in the rental market. 

I will be focusing less on what has happened in the past and more on a visionary assessment for the future.

This will also include highlighting regional areas that have long-term development strategies as well as emerging towns and cities with large investments in vital infrastructure while also having property prices that are still accessible, ideally under the UK average of around £290,000.

I will also be sharing my thoughts on hidden gems, areas that offer good returns that can be expected to increase in value.

Location: Birmingham

Birmingham is the UK’s second-largest city by population and has one of the youngest populations in Europe, with over 40% of the city aged under 25, making it a haven for property investors.

With a graduate retention rate of 46%, which is one of the highest in the UK, and a population of over 100k students, Birmingham is an important student city offering numerous employment opportunities.

Affordable properties

In the last 12 months, the average sold price of a property in Birmingham was £244,203.

High rental income and strong rental yields

The average cost of a flat according to Zoopla is  £140,000 and average rent for 1- and 2-bedroom flats is £895 per month, resulting in a gross yield of 7.63%.

High levels of regeneration

As the second in the list of UK’s top tech cities, a recent report highlights that Millennials and Generation Z will be critical to filling the roles created by the tech sector in Birmingham – the prime renter demographic.

Birmingham’s residential property market demonstrates significant growth potential. A large growing economy and positive demographics, as well as significant numbers of higher paid commuters travelling into the city, support the trend of strong future house price growth in the city.

The awarding of the 2022 Commonwealth Games and, more recently, the 2026 European Athletics Championships to Birmingham has resulted in a £700 million investment throughout the city, with numerous suburbs reaping the benefits.

The High Speed 2 (HS2) is expected to revolutionize Birmingham’s housing market by driving increased demand from buyers searching for more affordable real estate options than those in London, while simultaneously supporting thousands of new jobs. 

Good transport links

Birmingham is connected to the rest of the United Kingdom by the M5, M6, M40 and M42 motorways.

The station provides transportation to many major cities whilst Birmingham Airport offers a wide selection of flights to destinations throughout Europe.

Additionally, the West Midlands Metro tram system offers services throughout the city, with plans to extend the system further. A new rapid transport bus network, known as the Sprint bus system, is in the works and will offer express routes.

Location: Loughborough

Loughborough is the largest town in Leicestershire with a population of over 55,000 and a thriving university community.

The large student population in Loughborough and the high demand for housing from all types of tenants indicate that there is a great potential for house prices to increase.

Affordable properties

The average sold price for a property in Loughborough in 2022 was £282,727.

High rental income and strong rental yields

The average cost of a flat according to Zoopla is £129,276, and the average rent for a one or two bedroom flat is £710 a month, which amounts to a gross yield of 6.6%.

High levels of regeneration

Loughborough is going through a period of growth with a planned urban extension to the west of the town expected to deliver 3,000 new homes by 2028. This will be accompanied by the expansion of important employment sites such as the Science and Enterprise Park.

A £1.9 million regeneration project in Loughborough town center is also underway to boost local trade, as well as a Loughborough Town Deal investment plan proposing a range of projects. These include improving connections between the railway station, town center and university; developing areas for housing, leisure, and commerce; showcasing the town’s heritage; and improving job and life skills for 5,000 young people from disadvantaged backgrounds.

Good transport links

The M1 connects Loughborough to the rest of the UK with direct trains from Loughborough station going south to London and north to Derby, Nottingham and Sheffield.

Location: Peterborough

Peterborough is the country’s fifth fastest-growing city and an ideal location for bikers who prefer a relaxed ride, as the Fenlands provide an almost entirely flat terrain with no significant inclines for a great distance.

Peterborough boasts affordability and convenience, being one of the least expensive places in the East of England and just 46 minutes away from London. It has become a popular, affordable destination for those looking to get close to the capital.

According to Peterborough City Council, the city is the fifth most rapidly expanding city in the nation and will need an additional 19,400 dwellings by the year 2036.

Affordable properties

The average sold price for a property in Peterborough in 2022 was £266,763.

High rental income and strong rental yields

The average price of a flat according to Zoopla is £121,845, and the average rent for 1- and 2-bedroom flat is £822 per month. This gives a gross yield of 8.1%.

High levels of regeneration

Peterborough is undergoing huge regeneration which includes a £48million scheme to redevelop the area around Peterborough Train Station – known as Station Quarter. This project aims to make improvements to better connect Peterborough Train Station directly to the city center.

In addition, the North Westgate scheme, valued at over £80 million, will include commercial, leisure and residential uses. The Northmister scheme is a £90 million vision to create a residential-led, mixed-use scheme with public realm upgrades. Furthermore, a £31 million investment has been made to create a business and technology university with a curriculum tailored to the regional economy’s growth sectors.

Peterborough United Football Club joined the regeneration plans with a proposal to build a new stadium with the capacity of 17,500 people on the Embankment.

Good transport links

Peterborough is becoming increasingly attractive to people who need to get to London quickly but don’t want to pay high living costs. It is only 98 miles away and the quickest train journey takes just 46 minutes.

As well up to five trains an hour into London, there are also express trains to the Midlands, Yorkshire, Leeds, Newcastle and Scotland.

Peterborough is also right on the A1 and A1(M) motorway and the main A15, A16 and A47 routes.

Find out where the people are going and buy the land before they get there.

William Penn Adair

Location: Liverpool

Liverpool is a vibrant, creative city with a wealth of culture, art, music and nightlife and is the fifth most visited city in the UK.

The worldwide acclaim of the Beatles, which many view as the most influential music group ever, prompted Liverpool, their hometown, to become a popular tourist destination.

Liverpool has the second highest number of art galleries, national museums, listed buildings and listed parks in the UK as well as a number of theatres and music venues.

Affordable properties

The average sold price for a property in Liverpool in 2022 was £206,338.

High rental income and strong rental yields

The average price of a flat according to Zoopla is £149,019 and the average rent for 1- and 2-bedroom flats is £949.50 per month producing a gross yield of 7.25%.

High levels of regeneration

Liverpool has been transformed into one of the UK’s leading business destinations by an ambitious and far-reaching regeneration program.

The mission of the KQ Liverpool regeneration project is to reduce the economic gap between London and the Southeast by fostering and supporting the growth of innovative industries within the Knowledge Quarter. This region houses numerous major innovators in science, health, technology, culture and education, and has more than £1 billion of new developments currently in process.

Liverpool Science Park aims to develop and operate the most innovative science and technology buildings in the world. Construction of a £17.8m office and “innovation space” development has been completed at a world-leading city region science park.

Project Violet, located at Sci-Tech Daresbury near Halton, is projected to generate and sustain 332 full-time equivalent positions in knowledge industry firms.

Liverpool City Region is to receive £710m funding from the government to improve its transport infrastructure.

Good transport links

Liverpool station is a hub for transport in the Northwest, offering connections to other towns and cities such as Blackpool, Manchester, Preston, Warrington and Wigan. Many of these services also call at other stations within the city.

Liverpool Lime Street station offers frequent services to London Euston, with hourly connections that increase to two trains per hour during rush hour. There are also regular services to many major towns and cities in the UK, such as Birmingham, Leeds, Norwich, Nottingham, Sheffield and York. Furthermore, Liverpool Airport provides international connections to the city.

Location: Leeds

Leeds has been gaining popularity as a property hotspot in the UK and its local economy has been flourishing, resulting in a surge in population. In the last two years, approximately 10% of those leaving London have chosen to relocate to Leeds.

Leeds retains almost 39 per cent of its students on graduation and is fast becoming one of the major economic and graduate hubs with a thriving digital and technology centre as well as housing some of the UK’s major legal and financial companies.

The vibrant atmosphere and lively nightlife of Leeds is thought to be a major factor in why many students decide to stay in the city.

Affordable properties

The average sold price for a property in Leeds in 2022 was £256,843.

High rental income and strong rental yields

Average rent for 1 and 2 bedrooms is £903 according to home.co.uk, giving a yield of 6.9%

High levels of regeneration

The recently completed £161 million renovation of Leeds City Station, a major transport hub for the city and Northern England’s busiest station, is one of the major regeneration projects. The project involved lengthening platforms, constructing a new concourse and platform and improving track work to enhance the reliability of trains. Construction of further works, such as the creation of a station district and upgrades to the nearby public spaces, is slated to start in 2023.

The ‘west end’ of Leeds is set to be revitalized with the introduction of the £270 million Lisbon Square project. This development will include residential apartments, hotel facilities and a mix of commercial office space. It is predicted to be a major contributor to the economic growth of the city and to double the size of the city-center, while also providing an attractive public space.

There are also plans for a mixed-use scheme to transform the former International Swimming Pool, transformation of the City Park in the South Bank, redevelopment of Temple Green Park and Ride and the renovation of older homes in the Holbeck area of the city.

The Leeds South Bank regeneration project is set to significantly expand the city center, with plans to double its size by reconstructing the ex-industrial area south of the River Aire. This endeavor is anticipated to have a substantial economic impact on the region with the additional re-development of a hospital.

Good transport links

Leeds railway station is the mainline railway station serving the city centre of Leeds in West Yorkshire. It is the fourth-busiest railway station in the UK outside London.

The station is served by frequent, high-speed inter-city services to London King’s Cross every thirty minutes and is an important stop on the Cross Country Route between Scotland, the Midlands and Southwest England connecting to major cities such as Birmingham, Glasgow, Edinburgh, Derby, Bristol, Exeter, Plymouth and Penzance.

There are also regular inter-city services to major destinations throughout Northern England including Manchester, Liverpool, Newcastle and Sheffield.

HS2 will serve six stations between the West Midlands and Leeds transforming connectivity between our major cities.

Conclusion

Investors looking for a chance to get onto or climb up the housing ladder in 2023 may find good investment potential by investing in real estate in areas undergoing urban regeneration and development despite rising costs of living and interest rates.

Urban regeneration is an indication of potential upcoming economic development, providing improved local facilities, drawing in new inhabitants and causing a raise in real estate prices.

The areas listed above are just a handful of suggestions and should not be taken as a definitive list. The criteria used can be applied to any area you choose to invest.