There are numerous reports and indexes produced by property agencies, developers, and journalists that rank cities for their investment potential and answer a common question: where to invest in UK property? More often than not, these reports coincide with the launch of new development.
Last week saw the publication of ‘Hot Housing Index 2021: the UK’s best BTR (Build to Rent) locations to invest in UK Property, by Property Week using data from data consultancy, CACI. As well as identifying the ‘best’ BTR locations, the CACI also researched tenants of build-to-rent apartments to establish the most important factors for tenants when choosing a new home.
Why is Build to Rent important for small investors?
If you’re a small investor or have a small portfolio of properties, why should you pay attention to what’s happening in the BTR sector? Buying near a Build Rent development can be an excellent property investment strategy. Build to rent is a relatively new concept in the UK, Australia, and New Zealand, but it’s been around for a long time in the US, known as multi-family housing.
Build to Rent is what it says on the tin. It’s a new development built specifically for tenants, and one prominent institutional investor generally owns the whole building. Institutional investors spend vast amounts of money on data and research and have specialist teams scrutinize this data to determine the best locations to buy new investments. Small investors can “piggy pack” on all their hard work and research by following what the build-to-rent investors are doing.
These same investors also spend a lot of money promoting and marketing their building to potential tenants. They do lots of hard work creating a tenant pool and creating a demand for rental properties finding the possible best places to invest In UK property.
Savvy investors can use all of this hard work to their advantage by purchasing property close to successful build-to-rent developments. Small investors can tap into this ready-made market because not everyone will want to go for a property in that particular building, especially if the property is available to rent for less than the property in the build-to-rent development.
The other great thing about build to rent a property is that it sets the bar for rents in the area. Rents in build-to-rent developments will be the top end of what can be achieved in that location.
So if you’re thinking to invest in UK property or buying a property close to a build-to-rent building, you know that your Rent will not be above what is being achieved in the build-to-rent development. Meaning you’ll have an apparent guide as to what your Rent is likely to be.
Where to invest in UK Property? These are the top 10 locations for Build to Rent
The CACI created a ranking that combines rents, affordability, yields, the volume of potential customers, and population growth to identify the top ‘investable’ locations across the UK. The CACI’s research amongst tenants of Build to Rent apartments established the most important factors when choosing a location, these were: proximity to friends, proximity to work, transport links, proximity to green space, the quality of local shops, and F&B amenities and access to high-speed internet.
CACI incorporated these factors into its methodology for creating the rankings. The CACI’s top ten ranking best places to invest in UK property for BTR investments are:
| Rank | District & local authority | Annual rent | Affordability | Yield | Likely movers | Population growth | Total |
| 1 | Coventry | D | C | C | A | A | 71% |
| 2 | Central Bedfordshire | B | D | C | A | A | 71% |
| 3 | Aylesbury Vale | C | C | C | A | A | 70% |
| 4 | South Gloucestershire | B | D | C | A | A | 70% |
| 5 | Colchester | B | D | C | A | A | 70% |
| 6 | Milton Keynes | B | D | B | A | A | 69% |
| 7 | Swale | B | C | B | B | A | 69% |
| 8 | Sandwell | D | B | A | B | B | 68% |
| 9 | Ashford | C | B | C | B | A | 67% |
| 10 | Leeds | B | D | B | A | C | 66% |
You can read Property Week’s full report here. Tolga Necar, Managing Consultant at CACI also notes “There is an east-west pattern taking place in London, with the biggest opportunity for BTR in the capital to the east and north of the city, largely driven by the underlying demographic of the area.” The highest-ranking London borough is Barking and Dagenham.
The reality is that the best places to invest in UK property for an investor will be largely driven by their personal investment strategy and personal circumstances. We are advocates of building knowledge and understanding the marketplace. So take time to read the latest ‘hot spot’ lists and rankings, but do your own research and implement an investment strategy that aligns with your investment objectives.
Important notice: Proptech Pioneer and its associated companies seek to provide investors with guides, information, and tools, but we cannot guarantee this information to be accurate or perfect. You use the information at your own risk and accept no liability if you rely on this information. Proptech Pioneer is not a tax advisor, accountant conveyancer, lawyer, financial advisor, or mortgage advisor. You should seek independent advice from independent professionals before making any investment decision.
