Property Investment Hotspots in the Midlands

Posted by Mark Lloyd, Property Mastery Academy on 11 August 2017 | Comments

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Following our last post on the potential property hotspots in the south of England, we now cast our eye on the Midlands – and find that there’s a lot to talk about.

New research by Barclays Property Predictor shows that the Midlands has the fourth highest expected annual price increase in the UK at 1.22% only surpassed by the east of England, the South East and London.

While Crossrail 2 is having a big impact on the South East of England, High Speed 2 (HS2) the planned high-speed railway linking London, Birmingham, the East Midlands, Leeds and Manchester is influencing property prices in towns and cities in the North of England and the Midlands.

Property Hotspot - Derby, East Midlands

Derby and the surrounding area will be able to take maximum advantage of the building of HS2 in terms of the rail contracts and system deals it will generate. Derby is already home to one of the largest clusters of rail companies in the world.

As a result of this increased connectivity, property prices in Derby are expected to rise by 23.3% by 2019 according to BNP Paribas Real Estate.

Property Hotspot - Peterborough, East Midlands

Savills, the global real estate services provider, predicts that the East of England will experience a 19% increase in property prices while the Royal Institution of Chartered Surveyors (RICS) has forecast that property prices in East Anglia will outstrip those of any other area in the UK including London and the South East.

In Peterborough, property prices have risen by 477% between 1986 and 2016, far outpacing the national average. The city has become an alternative for tech workers priced out of Cambridge while London is reachable in under an hour.

There is a high percentage of young people aged 29 or under residing in Peterborough – that equates to 41% compared to the national average of 38%. This age group is likely to rent as this option gives them the most flexibility. Therefore, the rental market in Peterborough makes the city an attractive proposition for buy to let investors.

Property Hotspot - Stratford Upon Avon and Warwick, West Midlands

Stratford Upon Avon and Warwick were named as two of the most promising places to invest in property following research by Barclays Property Predictor with some of the best rental opportunities in the area.

There is high employment across the West Midlands with particularly good average household incomes in Stratford Upon Avon. Barclays has forecast that house prices in Stratford Upon Avon will rise by 23% in the next four years – in contrast to the average growth in property prices across the UK, which Barclays has estimated will be 6.1%. Barclays predicts an annual increase of 4.23% for the town.

In Warwick, house prices are expected to rise by 29.5% by 2021, positioning it in the top 20 highest areas of growth with an expected annual increase of 5.31%.

Property Hotspot - Solihull, West Midlands

According to property website Zoopla, Solihull is one of the areas, out of all of Birmingham’s commuter hotspots, that saw a big increase in property prices in 2016 and this continued into 2017.

Zoopla looked at how long it can take for houses to increase in value enough to cover the annual cost of commuting – this is an important consideration as rail prices continue to rise. In Solihull, the average property increased in value by £34,695 last year, to an average of £341,470. This equates to £95 per day and a 10.7% increase since 2015. This rise in value would offset the cost of your travel in just seven days if you live in Solihull and commute by train to Birmingham.

With property prices rising, Solihull is looking like a strong investment area.

Property Hotspot - Longbridge, West Midlands

After the famous MG Rover factory closed, £1 billion was spent on rejuvenating Longbridge town centre with the intention of generating new jobs and supplying better housing. So far, a retail park, hotel, college and commercial spaces have all been built with more redevelopment in the pipeline.

Plans for 300 new homes and a community centre have been announced recently. However, despite this injection of cash, house prices currently remain lower than the Birmingham average. According to the Zoopla House Price Index, the average price paid for a property in Longbridge was £131,422.

As the rest of Birmingham has a total average property price of £176,897, Longbridge is the place to pick up a property bargain, before prices start to increase.

More property investment hotspots across the UK

We’ve now looked at the south of England and the Midlands, and in the coming weeks, we will see what the north of England and Scotland has to offer property investors in terms of up and coming areas and potential new deals.

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