A recent analysis by estate agent Lomond found that two Nottingham postcodes landed in the top 10 postcodes for best rental yields in the UK. NG1 and NG7 were found to yield 10.8% and 9.7% respectively, which ranked them in 4th and 6th place out of the whole of the UK. Although some caution against reading too much into postcode data due to the potentially low number of transactions skewing figures in some areas, Nottingham remains a property investment hotspot for several reasons.
If you’re considering buying a property in Nottingham, there’s a good chance it will be a good investment. Obviously it will depend on the property itself, which is where hiring a good surveyor in Nottingham is important, however the city’s characteristics, location and population are highly favourable. Here’s why.
1. Nottingham is in the top third most affordable areas in England and Wales
With an average property price of £242,000, Nottingham stands out as an attractive property investment hotspot. Ranking as the 30th cheapest postcode area out of 105 in England and Wales, Nottingham offers good affordability amidst the backdrop of the UK housing market. Being an affordable entry point coupled with high rental yields is one of the top reasons landlords invest in Nottingham.
2. Strong housing market (depending on the data – read more)
In Nottingham, the average house price has surpassed £200,000, specifically measured at £201,200 by Hometrack. This reflects a significant 4.9% year-on-year increase, marking Nottingham as the top performer nationwide in house price growth from April 2023 to April 2024. It’s important to note, some other tracked data indicates house prices were actually down, such as the 2% decrease found by Rightmove. Meanwhile, ONS found similar prices for detached properties, but a small drop for detached. Therefore, the actual local market growth sort of depends on which data you’re looking at, including what type of property you’re looking at. However, taking into account different trackers, it seems that Nottingham is fairly stable and a safe bet overall.
3. Nottingham is a very popular student city
With a thriving student population, demand for student accommodation remains consistently high throughout the academic year. This steady demand provides property investors with a reliable rental income stream and reduces vacancy risks. Moreover, the presence of students often helps local businesses and amenities too, which helps the local economy. Consequently, Nottingham’s strong student market contributes significantly to its reputation as a lucrative and stable area for property investment.
4. The rental market in Nottingham is stable
It’s not just students in Nottingham that contribute to a strong demand for rental properties. Nottingham is a great place for buy-to-let investment because it’s also an attractive city for other types of renters; young professionals, families, and others. This diversity reduces the risk for landlords, as the demand is spread across different demographic groups, ensuring lower vacancy rates and consistent rental incomeHaving a sustained demand also contributes to higher-than-average rental yields in areas like the city centre and Beeston, providing landlords with a healthy AND reliable rental income.
5. Regeneration projects boost property values and rental demand
Nottingham is undergoing significant economic growth and regeneration, which boosts both property values and rental demand. Projects like the £650 million Island Quarter development and the Broad Marsh Green Heart are transforming the city, enhancing its appeal and infrastructure.
6. House prices for first-time buyers are relatively low
If you’re looking to buy your first property in the hopes of renting it out, then Nottingham is a great place for first-time buyers. The average price paid by first-time buyers was £179,000 in April 2024 (provisional). This was 1.4% lower than the average of £181,000 in April 2023 (revised).
Recap of 6 reasons why you should invest in Nottingham
- Affordable entry point
- Strong housing market
- Student city
- Reliable rental demand and yields
- Ongoing regeneration projects
- Low investment for first-time buyers
There are lots of other aspects to Nottingham that make it a popular city to live in, which in turn makes it a popular city for renters. This includes things like cultural attractions and infrastructure, the aforementioned local universities, the historical appeal etc.
But if you’re looking to invest, you should also think about the immediate area and property itself.
Which are the best buy-to-let areas in Nottingham in 2024?
City Centre: The heart of Nottingham is always in demand, especially among students and young professionals. Furthermore, proximity to universities, shopping centres, restaurants, and nightlife drives high rental yields. Apartments in this area are particularly popular due to the convenience and lifestyle they offer.
Lace Market: Known for its historic charm, the Lace Market appeals to a wide range of tenants, thus making it a good area for landlords. This area offers a blend of old-world architecture and contemporary living spaces, making it a sought-after location for both students and professionals.
Beeston: Located near the University of Nottingham, Beeston is a hotspot (or the hotspot) for student rentals. It has a range of affordable properties and excellent connectivity to the city centre, making it an attractive location for both students and professionals. The area’s rental yields are also high thanks to the constant influx of students.
West Bridgford: This is a more affluent suburb, so it’s popular among families and professionals due to its high living standards, excellent schools, parks, and local amenities. While property prices might be higher, the strong rental demand ensures steady rental income and capital appreciation. If you can afford the entry point, it’s most likely worth the investment.
Hockley and Sneinton: These areas are experiencing increased popularity due to ongoing development and regeneration projects. They offer a more affordable entry point for investors with potential for capital growth and good rental yields.
Lenton: Primarily a student area due to its proximity to the University of Nottingham, Lenton is a pretty reliable investment choice in Nottingham. You’ll typically get pretty good rental yields here, and like with other student areas in the city, rental properties are in demand.
Arnold and Carlton: These family-friendly areas offer spacious properties and access to good schools, appealing to long-term renters. The growing demand in these suburbs makes them ideal for buy-to-let investments aimed at families.
Why you should get a Nottingham surveyor for your buy-to-let property
As mentioned, the property characteristics and condition are also deciding factors in whether your buy-to-let in Nottingham is a good investment or not. A local Nottingham surveyor brings in-depth knowledge of the area’s housing market, building conditions, and regulatory landscape. They can provide detailed assessments that identify structural issues, compliance with local building codes, and potential future problems, helping you avoid costly repairs and legal issues down the line.
Additionally, surveyors offer insights into the market value of properties, ensuring you make informed decisions and pay a fair price. This expertise is especially valuable in Nottingham’s dynamic market, characterised by diverse property types and ongoing regeneration projects.
