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Best places to invest based on capital growth

When it comes to investing in property, it pays to know about the latest property hotspots and up-and-coming areas, not just as far as potential rental returns are concerned, but also possible capital growth.

Although residential property price growth across the UK has been somewhat subdued of late, buy-to-let investors can still expect a strong return on investment in certain areas over the next few years.

Kuflink has assessed which locations across the UK will record the strongest property price growth in the medium term.

With changes to buy-to-let tax relief and increases in stamp duty creating a challenging investor market, these locations offer a potential goldmine for the savvy investor, according to the property investment experts, which used figures taken from PropertyData, YourMove and Land registry data, with average property prices from Rightmove.

Narinder Khattoare, CEO of Kuflink, said, “Despite the challenges facing the UK property market, our analysis has identified five key areas showing very promising signs of growth.

“We’ve highlighted these locations as likely hotspots in 2018, with the potential to offer significant returns for a savvy investor”.

Hull

Named one of the Rough Guide’s Top Ten Cities to Visit in 2016, alongside Reykjavik and Vancouver, Hull has recently undergone a major regeneration project, with the government pledging £250m to develop public and private infrastructure, and fund the creation of 7,500 jobs.

As the UK’s current City of Culture (a title it will hold till 2020), Hull has a spotlight on the world stage, and a raised profile as a world-class arts destination.

With house prices yet to catch up to its increasing popularity with young professionals, averaging £121,004 and up 8% on 2015, investors should be taking note of this cultural urban enclave.

Colchester

Along with the accolade of being the UK’s oldest town, Colchester is also one of the UK’s fastest growing cities, with an 18.9% population increase from 2001-2015. The town boasts lower than average house prices in comparison to neighbouring Southend-on-Sea and Chelmsford, direct transport links to London, and access to picturesque countryside nearby, making it ideal for both families and young professionals.

House prices in the area have been relatively unaffected by the national slump in prices, with capital gains resting at an impressive ten percent and making for sizeable ROIs for investors.

Salford

Situated in the borough of Greater Manchester, Salford serves Manchester’s 100,000 strong student community with excellent transport links to a thriving city centre, and investors can expect yields averaging twice that of London at around 5%.

Salford Quays is home to the second largest media hub in the UK, and “Second Tier cities” such as Manchester have seen interest grow rapidly in recent years.

With £1bn in backing from the government’s Northern Powerhouse Initiative earmarked for the region, Salford is likely to continue its upwards trajectory as a focal point for investors.

Luton

Continuing the trend of up and coming commuter belt towns, Luton in Bedfordshire is one of the ones to watch in 2018. The town has seen an influx of renters age 25-29, up nearly 9% between 2015 and 2016, attracted by Luton’s below average prices and London links.

Alongside an increased appetite for avocados, millennials also bring with them high demand for rental and new-build properties, with rental price growth currently around the 5% mark and showing no signs of slowing.

Toton 

This sleepy Nottinghamshire town has been chosen as the only East Midlands hub for the HS2 rail project, and will see the creation of a major depot, a proposed “garden village” city, and a fifty-one minute direct link to London by 2033.

With planned connections to Leeds, Birmingham, and London, and a cheaper than UK average house price of £191,623, investors looking for a long-term commitment can expect to benefit from added jobs, housing, and an influx of private renters.

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    surely if you are after capital growth then that's property dealing as opposed to being a landlord, while it's nice to see our properties worth more than we paid for them ,but for me it's the income i am getting from them. i bought a property in lowestoft last year, if i were to put it back up for sale now i would make a capital lose, but why would i want to when i'm getting a good return on the money i put into it, as with share dealing you only make that capital lose or gain when you sell

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    I'm in it for the capital gain, I don't want to charge my tenants any more than I need to.

     
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    It's a bit strange that Newport,South Wales isn't on the list. It was named as the fastest moving housing market by nearly all the nationals a month or so back and we have seen tremendous capital growth over the last year. The rises are due to a mass influx of first time buyers from Bristol, thanks mainly to the announcement that the tolls will be dropped on both Severn Bridges which makes a commute from newport to Bristol much more affordable. Sitting between Cardiff and Bristol where property prices are considerably higher, and the interest now being shown by investors around the country, property prices in Newport can only keep rising.

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