Liverpool City Centre, an investment hotspot

A new year signals renewed optimism, and 2021 could do with an injection (no pun intended) of hope more so than any other. Yet, it’s not all bad news; while the Covid pandemic left its impact on just about every facet of life, the UK property market continued to bounce along and go from strength to strength. 

Predictions point towards a healthy year for sales and lettings in 2021, and property developers and investors are already thinking about the next investment hotspots. So instead of doing those typical “year ahead” articles, we’re focusing our efforts on the best places to invest in the UK in 2021.

We’ve chosen five areas ripe for both good yields and capital growth further down the line. From neighbourhoods along the Elizabeth Line to northern hotspots, read on to see which areas we think are worth your attention in 2021. 

Romford, Greater London

Romford already enjoys convenient travel links into the City, and with a stop on the Elizabeth Line in 2022, it’s transport options will only get better. House prices in the area saw an impressive eight per cent rise in 2020, and values should increase further once the Elizabeth Line opens next year. 

The Greater London neighbourhood is seeing significant investment from property developers and large-scale portfolio owners: The Reflections development from Taylor Wimpey, with its landscaped open spaces, provides a good template for creating residential, community-led homes. However, despite some regeneration, Romford is still an area that is yet to see its full potential and is ideal for investment in 2021. 

Current yields: 5.2 per cent

Current house price average: £230k for a one-bedroom apartment 

Salford, Manchester

The regeneration in Salford continues, with a number of homes either completed or under construction. Many of these properties make up part of the Build-to-Rent sector, with developers becoming landlords after constructing the buildings. 

Property prices have increased by an impressive 38 per cent in the last three years. With MediaCityUK and the waterside regeneration integral parts of the neighbourhood, expect demand for Salford homes to continue picking up pace. Property prices are expected to increase by 27 per cent in the next five years. 

Current yields: 6.3 per cent

Current house price average: £170k for a one-bedroom apartment 

Dudley, West Midlands

The West Midlands town of Dudley might go under the radar somewhat, but it’s proving to be an investment hotspot for savvy investors and developers. While average rents are just £500 per month, one bedroom properties sell for around £85,000 and offer eye-catching yields well above average. 

Dudley is just 16 miles to Birmingham and is a convenient commuter town for people looking for affordable homes. There’s already significant redevelopment in the area, with many former office blocks converted into new homes. And with a seven per cent increase in house prices in the last 12 months, Dudley has plenty going for it. 

Current yields: 7 per cent

Current house price average: £85,000k for a one-bedroom apartment 

Liverpool City Centre, Liverpool

The L1 postcode leads the way for investment in Liverpool, with impressive yields that often surpass five per cent. Regeneration down by the docks has transformed the city, and it’s no surprise that investors have cast their eye on the Merseyside. 

Development continues to pick up pace in the city centre with a raft of new builds set for completion in 2021. House prices increased by nine per cent last year and are expected to perform impressively over the next five years, with a 27 per cent rise. 

Current yields: 5.9 per cent

Current house price average: £116,000k for a one-bedroom apartment 

Barking & Dagenham, East London

London remains an investment hotspot, despite the fact it was one of the poorer performing cities throughout 2020. However, long term trends point to confidence in the capital, and Barking & Dagenham is another area with plenty of potential.

Apartments, in particular, have performed well in the area, growing by two per cent over the last 12 months while most London postcodes saw a dip. With trains to Fenchurch Street in just 20 minutes, Barking is well placed to connect residents to the City. This is one of the primary reasons for its popularity and why it will continue to be a good investment. 

Current yields: 5.9 per cent

Current house price average: £216,000k for a one-bedroom apartment 

Finding the right opportunities 

Whether it’s the development of land or spotting an already-established property, the areas on our list provide investment opportunities for the next 12 months. While many aspects of this year are unpredictable, we can take some solace in a robust property market that could grow even stronger throughout 2021.