Recent changes to toughen up mortgage lending affordability criteria and a slow down in the housing market might make buying back in the UK a little tougher but you shouldn’t let it put you off. There are still some bargains to be had and decent returns on investments to be made – you just have to think outside of the box.
If you’re an expat planning to buy in the UK or extend your existing portfolio, it’s definitely worth looking beyond London. While the capital is still a good investment for long term gains with an average return on investment of 11%, there are plenty of other cities around the country which can offer you a decent return without such a huge capital outlay.
Manchester
Often considered the pinnacle of the UK’s so-called Northern Powerhouse, Manchester has a wealth of opportunities for the expat buyer. The city centre has seen huge investment in recent years which has pushed up property prices but yet, they still remain far lower than London.
The creation of the BBC Media City, the continuing popularity of the trendy Northern Quarter, which gives Manchester its aura of cool, and a substantial extension to the city’s tram system have also helped make it a property hotspot.
According to Zoopla, the average price of property in Manchester is £177,863, an increase of just over 9% in the last 12 months. If you’re thinking about a buy-to-let mortgage, the average return on investment (ROI)* for the last five years is 9.9%, according to Lendinvest, not too far behind London.
Leeds
Leeds is another northern city enjoying plenty of growth and the average price of a semi-detached property is around £200,000 currently. The city’s housing market has enjoyed an average increase of just over 6% in the last 12 months and although the UK housing market is likely to slow down in 2017, with the development of HS2 rail project and the completion of the £150m Victoria Gate retail complex last year, Leeds is still likely to prove attractive to investors.
For expats considering buy-to-let, the city has enjoyed an average ROI of 8.4% over the last five years.
Hythe
With great coastal views available and within in commutable distance of the capital, Hythe is a hidden gem in the South East.
The seaside town in Kent is little more than an hour away from London thanks to the HS1 rail link and is just a stone’s throw from Belgium and France. The average house price is £346,117 and has increased by almost 9% over the last year. Generally, buy-to-let investment properties have enjoyed an average ROI of around 9% over the last five years, according to Lendinvest.
Rotherham
Once a thriving coal-mining town, Rotherham suffered when the industry closed but has since reinvented itself. Almost £500 million has been invested, a new railway station and a 12,000 seater football stadium are under construction and more than 9,000 jobs have been created.
The average house price in Rotherham is £143,208, up 7.7% in the last 12 months. Terraced houses come in at just over £84,500 while a detached house will set you back around £215,000.
Stockport
If you want to make a good return on your investment, it pays to go beyond the obvious option and look for properties in places you least expect. Stockport might not be top of your to-buy list but it is one such town where you could make a nice profit.
The town is ideally placed for a commute to Manchester, Liverpool, Birmingham and London and has been subject to huge investment and regeneration. The Stockport Exchange, one of the north west’s newest business hubs, is in the final stages of completion and Redrock Stockport a £45m leisure development is due to be completed later this year, creating hundreds of jobs.
The average price of a semi-detached house is £233,570 and properties in general have increased by 7% in value in the last year. If you’re considering the buy-to-let market you can expect an average ROI of 8.4%.
*ROI represents an addition of the rental yield plus the capital gains year on year.
