Liverpool, Birmingham and Manchester have emerged as the top
cities with the most investment properties
for less than £200,000.
The findings come from the insurance firm Pikl which says that while these
areas offer attractive opportunities, investors must consider the risks.
These include issues such as crime rates and flood zones.
The firm found that Liverpool boasts 2,502 affordable properties, driven by
the city’s economic regeneration and growing tourism sector.
However, investors need to be aware of higher crime rates in Toxteth and
the city centre, plus there are flood risks near the River Mersey.
‘Investing in a budget-friendly property’
Pikl’s holiday lettings insurance expert, Cliff Ward, said: “While these
locations offer affordability in overlooked locations, there are certain
risk areas that potential investment property owners may want to conduct
due diligence on before investing.
“Crime rates, flood risks, and structural integrity are potential factors
that could impact long-term property value and its rental viability in the
holiday lettings and private rental sectors.”
He added: “Investing in a budget-friendly property can be a great financial
move, but
understanding the risks
is key to making it a profitable one.”
Top 10 investment locations
The top 10 investment locations also include:
· Birmingham, with 1,663 affordable homes, benefits from a
growing business district and infrastructure projects like HS2. The city’s
clay-heavy soil might pose subsidence risks and areas like Aston and
Handsworth have high burglary rates.
· Manchester, listing 1,619 homes under £200,000, is known for
its thriving economy. Affordable options are available in Harpurhey and
Wythenshawe, but some South Manchester postcodes have higher burglary
rates. Older properties may have a lack of modern insulation, and some
might have structural issues due to outdated foundations.
· Nottingham, with 1,433 homes, attracts buyers for its lower
house prices. However, some areas have a high crime rate and there’s a
history of mining which might pose risks including ground movement and
subsidence.
· Leeds offers 1,178 affordable properties, providing strong
rent yields. Armley and Beeston are popular areas, but buyers need to be
aware of rent scams and flood risks.
· Hull, listing 1,108 properties, holiday let investors are
attracted to its coastal location. Inadequate drainage infrastructure are
concerns, plus there’s a flood risk. Older houses may require upgrading to
meet energy efficiency standards.
· Sheffield has 990 affordable properties, attracting
investment buyers. Older buildings may have updating issues, including
outdated wiring, insulation and plumbing. Property maintenance and
structural insurance cover are recommended to help with long-term costs.
· Doncaster, with 897 properties, offers strong growth
potential. However, high crime rates in some areas can impact viability.
Insurance premiums may be influenced by local crime rates.
· Stoke-on-Trent lists 860 affordable properties, benefiting
from a thriving economy. Subsidence risks due to former mining activities
and contaminated land pose challenges. Thorough surveys are recommended for
older properties.
· Sunderland, with 821 properties, is an appealing option for
investors. Flood risks and coastal erosion are concerns, and there have
been fluctuations in tenant demand. Structural integrity issues should also
be considered.
Popular student destinations
Simon Thompson, the managing director of Accommodation for Students, said:
“For UK student landlords, investment properties under £200,000 in cities
like Liverpool, Birmingham and Manchester offer attractive opportunities.
“Investing in affordable properties can be a lucrative move, but
appreciating the associated risks and taking necessary precautions is key
to ensuring a profitable venture.”
He added: “It helps too that most of those cities are popular student
destinations so affordable properties present promising investment
opportunities for student landlords.”
