Investing in Nottingham

While everyone else is flocking to invest in the more obvious cities like Birmingham, Manchester, and Liverpool (which are still very strong areas for property investment), a few savvy investors are keeping ahead of the curve by investing into other up and coming cities in the UK.

Top of that list is Nottingham, which according to Land Registry, saw average prices increase by more than 10% in the last 12 months. More than any other city in the UK. Some investors will be thinking they’ve missed the boat…think again. Prices in Nottingham are still considerably cheaper than the other major midland powerhouse areas like Birmingham and Leicester, however Nottingham has many of the same merits of it’s local rivals in terms of the level of inward investment, strong student population, and shortage of high quality residential property.

Not only are investors experiencing strong growth, rental yields are also well above the UK average (currently around 4%), coming in at over 6.6%. One of the reasons for this is due to a simple economic factor…supply and demand. Nottingham has two outstanding Universities, and as such attracts tens of thousands of students to the city every year, many of whom remain there after graduation. In addition, the NHS is a major employer, along with the likes of Boots, E.On, and Experian who all have substantial offices in the city. All these employees and students need somewhere to live, are constantly requesting high quality accommodation from letting agents, and currently Nottingham is a long way behind the target for the number of homes required to be built each year, with 2018 seeing a 5-year low in available properties for rent.

This shortage is not only forcing property prices upwards, but rental prices – some areas seeing a £121 a month increase from May 2017-18, putting the average rents now almost £50 a month higher than Liverpool – an area that has dominated the buy-to-let sector in recent years.

The exponential growth Nottingham is experiencing is showing no signs of slowing. More and more companies are seeing Nottingham as a prime location for setting up new offices and relocating their operation to – largely due to the affordability, with office rents and land prices being so low compared to other areas in the UK. One of the most notable relocations has been HMRC who have recently taken on a 276,000 sq ft office space to house 4,000 employees into the city.

Letting agencies in the city are desperate for more landlords and rental properties to cope with this current demand which is maybe not so great for tenants, but an excellent opportunity for landlords to benefit from a number of years of strong growth ahead, excellent rental yields, and very low risk of ever having a vacant property. That coupled with the low entry point for investment certainly puts Nottingham towards the top of the list of areas to invest in 2019.

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Stuart Williams

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