At Portico Invest, we believe that secondary and tertiary cities like Liverpool, Leicester, Clevelys, and Burton represent the future of profitable buy-to-let investment. With lower entry prices and higher rental yields compared to already developed areas such as London, Manchester, or Birmingham, these locations offer a compelling opportunity for property investors.
1. Affordability and Higher Rental Yields
Secondary and tertiary cities have become attractive to investors due to the affordability of property prices. In contrast to London or Manchester, where property prices have surged, areas like Liverpool and Leicester offer significantly lower entry points for investors. This affordability translates into higher rental yields, as the cost of purchasing is lower but the rental demand remains strong. Investors in these regions can expect yields between 6-8%, while properties in more developed cities may offer lower yields due to high purchase prices.
For example, Liverpool is consistently ranked as one of the UK’s top cities for rental yields, with certain postcodes seeing returns as high as 10%. Similarly, Leicester has experienced rental growth, driven by a strong student and professional tenant market. Both cities offer excellent opportunities for those looking to generate consistent rental income from their investments.
2. Capital Appreciation Potential
While secondary and tertiary cities may not yet match the capital growth of areas like London or Manchester, they have significant potential for appreciation. Many of these regions are undergoing regeneration projects and economic transformation, which often leads to property value increases over time.
For example, Liverpool is benefitting from major infrastructure investments like the Liverpool Waters project, aimed at transforming the city’s waterfront. Leicester has seen significant urban regeneration, with commercial and residential developments driving up property prices.
Burton and Clevelys, while smaller and less urbanised, also offer excellent potential due to local regeneration efforts and rising demand for rental properties in areas with lower housing supply. The lower base price of properties in these towns makes them an excellent long-term capital appreciation bet as they continue to attract tenants and buyers priced out of larger cities.
3. Tenant Demand and Population Growth
Another key driver of buy-to-let success in secondary and tertiary cities is tenant demand. As large cities become more expensive, professionals, families, and students are increasingly looking to these smaller urban centres for more affordable living options. Liverpool and Leicester, for example, are thriving university cities with a high demand for rental accommodation from students and young professionals.
In cities like Burton and Clevelys, demand for rental homes is being driven by the local workforce and individuals relocating from more expensive areas. This rising demand is contributing to steady rental growth, offering consistent returns for buy-to-let investors.
4. Lower Competition and Greater Opportunities
Unlike London or Manchester, where the property market is highly saturated with investors, secondary and tertiary cities present less competition. This opens up opportunities to secure off-plan properties at discounted prices and benefit from greater capital appreciation in the future. These regions often come with added advantages such as developer incentives, including guaranteed rental yields or discounted purchase prices for early buyers, which can significantly enhance your overall return on investment.
5. Regeneration Projects and Infrastructure Improvements
One of the main reasons why secondary and tertiary cities are prime targets for investment is the influx of government and private sector funds into regeneration projects. For instance, Liverpool has seen significant development through projects like Paddington Village and Knowledge Quarter Liverpool. In Leicester, there are ongoing plans to revitalise the city centre, which will drive demand for both commercial and residential properties.
Smaller towns like Clevelys and Burton are also seeing infrastructure improvements and urban renewal efforts, leading to better connectivity, new amenities, and overall improved desirability. These transformations often lead to higher property values and make off-plan investments particularly attractive as the area grows in popularity and demand.
6. Long-Term Stability and Growth
While cities like London and Birmingham are already developed, secondary and tertiary cities offer long-term stability and growth potential. The combination of affordability, regeneration, and increasing demand creates a stable environment for investors seeking long-term appreciation and rental income. In contrast to London, where prices can be volatile and yields lower, these cities provide a more balanced and reliable return.
Conclusion: Invest Smart in Secondary and Tertiary Cities
At Portico Invest, we see now as the perfect time to expand your buy-to-let portfolio into secondary and tertiary cities like Liverpool, Leicester, Cleveleys, and Burton. These cities offer a unique combination of affordability, high yields, and strong capital appreciation potential, all while benefiting from significant regeneration efforts and rising rental demand.
With lower competition, strong tenant demand, and extensive growth opportunities, these locations are set to deliver excellent returns on investment. Contact Portico Invest today to explore off-plan opportunities in these high-potential cities and start building your buy-to-let portfolio for long-term success.