As we navigate through the third quarter of 2024, the UK property market continues to shine as a top investment choice, with particular emphasis on cities like Liverpool and Leicester. These cities are not just weathering economic challenges but are thriving, offering investors compelling opportunities for both capital growth and rental yields. Here’s why Liverpool and Leicester should be on every property investor’s radar.
1. Liverpool: A Powerhouse of Growth and Regeneration
Liverpool has consistently outperformed many other UK cities in recent years, and 2024 is no exception. The city’s ongoing transformation, driven by large-scale regeneration projects, has significantly boosted its property market. The Liverpool Waters development, a £5 billion project, continues to reshape the city’s waterfront, adding to its appeal for both residents and investors. This ambitious project, along with other key initiatives like the Knowledge Quarter and the Anfield Project, is turning Liverpool into a modern, vibrant hub for business and culture.
As of Q3 2024, property prices in Liverpool have seen a year-on-year growth of 6.3%, reflecting the city’s strong demand and the high level of interest from both domestic and international investors. The city also boasts some of the highest rental yields in the UK, averaging around 7.8%, making it a hotspot for buy-to-let investments (Alliance Investments).
2. Leicester: A Hidden Gem with High Returns
Leicester, often overshadowed by larger cities, has quietly become one of the most promising property markets in the UK. The city benefits from its strategic location in the Midlands, excellent transport links, and a thriving local economy. Major employers like PepsiCo, Next, and Walkers are headquartered in or near Leicester, contributing to a strong demand for housing.
In 2024, Leicester has seen property prices increase by an impressive 5.5% compared to the previous year, with certain areas, such as Clarendon Park and Stoneygate, experiencing even higher growth. The city’s rental market is equally robust, with yields averaging 6.4%, which is particularly attractive given the relatively low property prices compared to other parts of the UK (RWinvest).
3. Strong Rental Yields Driven by High Demand
Both Liverpool and Leicester offer some of the most attractive rental yields in the UK, driven by a combination of affordable property prices and high demand for rental housing. In Liverpool, the booming student population and a growing number of young professionals have fueled the rental market. The city’s multiple universities, including the University of Liverpool and Liverpool John Moores University, ensure a steady stream of tenants for buy-to-let investors.
Similarly, Leicester’s status as a university city with a diverse and growing population makes it an excellent location for student accommodation investments. The University of Leicester and De Montfort University are expanding, attracting more students from both the UK and overseas, which in turn drives up rental demand. The city’s strong job market also attracts young professionals, further bolstering the rental sector.
4. Capital Growth Potential
The capital growth potential in both Liverpool and Leicester is substantial. In Liverpool, ongoing regeneration projects are expected to continue driving property prices upwards. According to recent forecasts, property values in Liverpool are projected to increase by an additional 12% over the next five years. This growth is supported by the city’s improving infrastructure, including the upcoming Merseyrail expansions and the ongoing development of the city’s business district.
Leicester, with its strong economic base and strategic location, is also set for continued property price growth. The city’s investment in infrastructure, such as the Leicester Waterside development and improvements to transport links, will likely drive further increases in property values. Investors in Leicester can expect capital growth of around 10% over the next five years, making it a solid long-term investment (Track Capital).
5. Favourable Market Conditions for Investors
2024 has seen the UK property market stabilize following the turbulence of 2022 and 2023. Interest rates have settled into a more predictable range, with mortgage rates averaging between 4% and 5%, making property investment more accessible. This stabilization, combined with a favourable exchange rate for overseas investors, has made the UK—and particularly cities like Liverpool and Leicester—more attractive than ever.
For international investors, the relatively weak pound continues to provide an excellent entry point into the UK property market, offering higher potential returns on investment. The transparency of the UK’s property market and its strong legal protections further enhance its appeal to global investors.
6. Sustainable and Green Investments
Sustainability is no longer just a trend but a key factor in property investment. Both Liverpool and Leicester have embraced green initiatives, with many new developments incorporating eco-friendly designs and technologies. In Liverpool, for instance, the Liverpool Waters project includes plans for green spaces, energy-efficient buildings, and sustainable transport options, aligning with the city’s broader environmental goals.
Leicester is also making strides in sustainability, with several new housing projects featuring solar panels, rainwater harvesting systems, and high energy efficiency ratings. Properties with strong green credentials are not only more attractive to environmentally conscious buyers and tenants but also command higher rents and sale prices, offering investors both ethical and financial returns (Track Capital).
7. Diverse Investment Opportunities
Liverpool and Leicester offer a wide range of investment opportunities to suit different strategies and risk appetites. In Liverpool, investors can choose from luxury waterfront apartments, student accommodation, and off-plan developments, all of which offer excellent potential returns. The city’s diverse economy and strong rental market ensure that there’s something for every type of investor.
Leicester, while smaller, offers equally diverse opportunities. From affordable buy-to-let properties in up-and-coming areas to commercial real estate in the city centre, Leicester’s property market caters to both new and seasoned investors. The city’s ongoing development projects also provide opportunities for those interested in property flipping or long-term capital growth investments.
Conclusion
As we move through Q3 2024, both Liverpool and Leicester stand out as prime locations for property investment. Their resilience, strong rental yields, and significant capital growth potential make them attractive options for investors looking to diversify their portfolios. With stable market conditions, favourable exchange rates, and a growing focus on sustainability, the UK property market—and particularly these two cities—offers a bright future for both domestic and international investors. Whether you’re seeking regular rental income, long-term capital appreciation, or a combination of both, Liverpool and Leicester should be at the top of your list.
