When it comes to choosing the right investment property, there’s only one thing that matters: the ROI. Leicester’s property market is packed with opportunities for anyone looking to make an investment. However, it’s a big financial decision, and you need to know what you’re up against.
In this article, we’ll take a look at some of the reasons which make Leicester an attractive market for investment properties. We’ll also look at what you can expect in terms of property values and other important facts you need to know.
Let’s get started with one of the more important questions.
Why Invest in Leicester?
Leicester offers several reasons as to why it makes a great place to invest. Here are three of the top reasons why you should consider investing in a buy-to-let in Leicester.
Access to a student rental market
The city of Leicester is home to two world-renowned universities which attract students and staff alike. But what’s more interesting is that The University of Leicester and De Montfort University are located a mere two miles apart. Combined, these two universities boast a staggering student population of over 43,000 individuals. These students come from many different areas, both domestically and internationally,
Not including students, there are over 6,000 dedicated staff members who support these institutions. This means there are approximately 50,000 people associated with these institutions alone. This produces a high concentration of individuals who usually look to rent rather than own property. So, while there may be tenants who rent for a short duration, there is always a consistent demand for student accommodation in Leicester.
A major city with less of the costs
Leicester is a major city in the United Kingdom. Now, many may think that being a city, buying a property will be expensive. However, unlike cities like London, where sky-high property values rule out opportunities for many investors, Leicester offers a stark difference.
Property values in Leicester are notably more affordable than in London and some other major UK cities. This affordability opens up opportunities for investors with lower budgets.
Additionally, as Leicester is still a major city, it benefits from a strong economy. This means there are many residents drawn to the city each year due to its appeal. As a result, there is a consistent demand for rental properties, ensuring that an investment property will not lack tenants.
Excellent commuter city
Leicester’s strategic location in the East Midlands places it within easy reach of major cities like Birmingham, London, and Nottingham. This accessibility not only makes it an appealing place to live but also attracts people looking for well-connected locations.
Additionally, the HS2 rail link will also connect Leicester to other cities. This is likely to push demand higher for property. The project isn’t likely to be completed for a few years; the most recent news indicates that it may be completed in 2033. Given that it is almost ten years away, demand for property will continue to rise, making now a great time to invest.
So, just how much does property cost in Leicester? The average property price currently sits at £280,000 for properties in Leicester. Let’s compare that to some other cities. Cardiff offers a similar property value at around £290,000. However, in London, the average price of property is around £806,000, which is a massive difference.
However, the value changes by the type of property in Leicester. Take a look below.
- Average price of a detached property: £425,000
- Average price of a semi-detached property: £284,000
- Average price of a terraced property: £230,000
- Average price of a flat: £140,000
Leicester Population Growth
Cities with a growing population tend to have a higher demand for properties. Leicester has recorded an 11.8% growth in its population from 2011 to 2021. The current population stands at around 370,000. Now, this figure is likely to continue rising, especially based on the last ten years. As cities like London become increasingly more expensive, many will look to move to other cities, and Leicester is located nearby, which may attract more residents.
As mentioned earlier, Leicester is home to a high student population, which offers a consistent and reliable source of tenants. Investors can benefit immensely from this demand, as it offers a stable and lucrative source of rental income.
However, Leicester is home to many other types of tenants, too, which further supports Leicester’s real estate market and offers a reliable source of rental income.
The average price of rent by the type of property in Leicester is as follows:
- One bedroom – £774 pcm
- Two bedrooms – £1,051 pcm
- Three bedrooms -£1,183 pcm
- Four bedrooms – £1,481 pcm
- Five bedrooms – £1,581 pcm
Landlord licensing schemes have been introduced in Leicester to improve the quality of private rented accommodation and protect tenants from rogue landlords. The schemes are particularly focused on areas of the city that have been adversely affected by housing-related issues.
The scheme covers specific areas in Leicester. This includes areas like:
- Braunstone Park
- Rowley Fields
However, houses in multiple occupations (HMOs) are not included as they already require mandatory HMO licences.
The licensing places a responsibility on landlords to ensure that the property is fit to live in. Specific responsibilities include ensuring gas and electrical safety, installing smoke and fire alarms, and managing waste disposal and tenancy issues. These requirements are all necessary in order to obtain a licence. There is a cost for the landlord licence application in Leicester at a price of £1,090 per property.
Investing in Leicester is a smart move with stable property prices and an excellent location. Additionally, the consistent student population ensures a steady stream of tenants. These factors combined make Leicester a top choice for those seeking a profitable and rewarding investment.
If you’re looking to invest in Leicester but need to sell a tenanted property first, we can help. As a cash house buyer, we can make you a free cash offer on your property. If you’re happy with the offer, we can purchase your property in as little as seven days. Leaving you free to move your investment into Leicester.