Is Buy-to-Let an Option for Investors in Stoke-on-Trent?

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Is Buy-to-Let an Option for Investors in Stoke-on-Trent?
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With more and more property investors looking to North Staffordshire for fresh long-term buy-to-let opportunities, Stoke-on-Trent is fast becoming one of the best places to invest in the UK. 

In fact, according to research conducted by Property Partner, out of 100 towns and cities in the UK, Stoke-on-Trent is the most attractive location for buy-to-let investments, boasting an excellent combination of affordable house prices, decent local salaries, and high rental returns. 

With this in mind, let’s take a closer look at what makes these areas so attractive for property investors.

Property prices

Property prices are a crucial factor to consider when evaluating the feasibility of a buy-to-let investment in Stoke. As of December 2022, the average house price across the UK was £294,329, indicating a slight dip of 0.4% compared to the previous month. However, when compared to the previous year, the average property price had surged by 9.8%.

When looking at Stoke-on-Trent’s property market by contrast, it is evident why the city has become a prime location for buy-to-let investors. The average property price in the town is just £117,586, a massive 60% lower than the national average, making it a highly affordable option. Assuming a 75% loan-to-value mortgage, an investor would need a deposit of only £29,397 to secure an average buy-to-let property in Stoke, which is significantly less than in many other areas of the country. But do your research and you could find properties in need of modernisation or renovations on the market for as little as £38,000. 

Moreover, the average property price in Stoke varies depending on the type of property. For instance, semi-detached properties, which are the most sold property type, had an average selling price of £173,149, while terraced properties sold for an average of £113,081.

Rental yields

With a population of over 250,000 people, Stoke-on-Trent is home to a diverse range of people, including students, young professionals, and families and they are lots of properties to choose from, including those who willing to sell a tenanted property to a new investor. The rental market in Stoke-on-Trent offers a variety of housing options, including apartments, terraced houses, and detached homes, at different price points to attract a wide range of potential buy to let investors. 

The average rental yield in the whole Stoke area is 4.2%, making it an attractive location for investors looking to capitalize on the growing demand for rental properties in the region. The lowest being 2.8% in ST13 which incorporates the areas of Meir, Longton, Weston Coyney, Blurton, and Normacot. The highest meanwhile is 5.4% in ST6 which is where you’ll find Burslem, Tunstall, Brown Edge, Norton-in-the-Moors and Whitfield. 

Best areas to invest 

The city of Stoke-on-Trent is divided into different districts, each with its own unique features and property markets. The central districts, consisting of Hanley and Stoke, are considered the heart of the city. The area offers traditional terraced houses, larger properties for house shares, and a student accommodation market, with average house prices ranging from £90,000 to £120,000. The northern districts, including Burslem, Tunstall, and other areas, offer a mix of inner-city and semi-rural properties at an average house price of £118,000 to £190,000, and yields of 4% based on the ST6 postcode. The southern districts, such as Fenton and Longton, are the hub of the city’s pottery industry and offer lower to mid-priced properties. The average house prices range from £112,000 to £140,000, and investors could expect yields of 4% in the ST3 and ST4 areas. Newcastle-under-Lyme, a separate large town to the west of Stoke, is known for being a popular residential area and offers family and professional lets at an average house price of £175,000 to £230,000, with yields of 5% based on the ST5 postcode area.

Employment opportunities 

Although Stoke-on-Trent was once a hub for heavy industries, such as steel and coal, these industries have since declined. Today, the city’s economy mainly revolves around light manufacturing and service industries. Local companies such as Bet365, a long-time owner of Stoke City FC and Vodafone are major employers in the area, along with Michelin, Water Plus, Seddon, Churchill China, and others. The University Hospitals of North Midlands NHS Trust is also a significant employer in the city. 

Despite the decline of traditional industries, Stoke has undergone significant regeneration in recent years. The Ceramic Valley Enterprise Zone, located in Stoke’s Enterprise Zone, has been one of the most successful in the UK, creating and attracting thousands of new jobs. Additionally, the city’s new Smithfield development, which cost £150 million, includes retail, leisure, residential, and office spaces. According to a survey, Stoke-on-Trent is the sixth-best city in the UK to start a business, making it an attractive location for entrepreneurs looking to invest.

Local Universities 

Stoke-on-Trent is also a popular university city, with two major universities in the area. Staffordshire University and Keele University attract thousands of students each year, and there are opportunities for property investors to purchase and rent out student housing. 

Stoke-on-Trent City Council has announced a new transport strategy aimed at improving transport links across the city. The strategy includes a very light rail (VLR) network connecting the six towns, major improvements to bus services, two new railway stations in Meir and Trentham, park and ride schemes and hubs across the city to make it easier to switch between transport services. The VLR network would connect the Northern, Central and Southern lines, while service improvements would include tap-on-tap-off readers, cleaner and more frequent buses, bus priority at junctions and upgraded bus stops. Rail travel would see a new station at Meir, discussions about reopening Wedgwood, Barlaston or Trentham stations, and an hourly service on the Stoke to Manchester line, while road improvements would include completion of the city centre ring road, the Etruria Valley Link Road, and the City East Link Road.

Stoke-on-Trent is a prime location for buy-to-let investors. The city offers affordable property prices, making it an attractive option for those looking to invest in rental properties. The average rental yield of 4.2% makes it an excellent location for investors looking to capitalize on the growing demand for rental properties in the region. Stoke’s employment opportunities have undergone significant regeneration in recent years and is a popular university city, creating opportunities for property investors to purchase and rent out student housing. Stoke-on-Trent’s new transport strategy will make it easier for commuters to travel within the city. 

With all these factors combined, it’s no surprise that Stoke-on-Trent is considered the most attractive location for buy-to-let investments in the UK.

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