Where should I buy my Buy-to-let Property in the Midlands?

The Midlands covers a broad swathe of the UK, and contains towns and cities which offer a considerable variety of buy-to-let opportunities.  There are no official boundaries to the Midlands, but the East and West do have different characteristics. Towns and rural areas also have different offers for potential landlords.

West Midlands Region

The main area of interest for buy-to-let investors here is probably Birmingham itself, and the surrounding areas.  City centre properties tend to sell for around £180,000 – well below the national average.  Growth in capital return has recently slowed a little however, as it has across much of the country. Buyers may therefore want to look to the towns on the edge of Birmingham, where lower prices and higher rental yields could make for a great first rung on the buy-to-let ladder.  Yields in the B8 post code area have recently reached 7.26%, and terraced properties can be found in Ward End for around £116,000.

Coventry is another city in this area where typical family let properties can be found for competitive prices. Do be aware of location when buying, however, as transport links and schools will become important considerations upon resale.  Semi-detached properties in Coventry currently sell for around £195,000, with growth over the last year around 4%, in line with national trends.

There are many beautiful rural areas within the West Midlands, particularly in and around the Black Country.  With its industrial past, this area has some attractive villages, but also considerable deprivation.  Research carefully before investing, but it could be looking at communities near good transport links.

East Midlands Region

The East Midlands holds a lot of interest for commuters due to its proximity to the capital.  This means that property around main train lines and motorways can offer good long term investment potential, but some areas are far less popular and have been hit by slow growth. 

Nottingham is a strong candidate for investment, with continued growth over 6% in the last year, way above the national average of 4.1%.  It’s possible to find a family home for around the average selling price of £184,000, and rental yields should be acceptable at around 5.6%. 

Prices in Leicester average around £195,000, but growth here has been considerably lower than in other parts of the region.  A terraced property in Derby can be had for around £123,000, but prices have hardly changed at all on last year.  Unless you can be sure of a great yield and can buy without relying on finance, this could be a risky area to buy in.

Rural areas in the east Midlands vary widely.   Within the popular Amber Valley, attractive villages such as Crich see average prices over £200,000, whilst a terraced property can be found in Alfreton for under £100,000.  As ever, check local facilities if determined to invest here.

Student Let Opportunities

There are some opportunities to invest in student properties in the Midlands, with the most well-known university towns being Birmingham, Wolverhampton and Coventry.  Birmingham offers a good range of properties likely to interest students, from more fashionable flats in areas which have seen recent investment such as New Street, to outlying areas on transport routes like Selly Oak.  A property here might average around £250,000, but the right investment should offer rental yields around 7.5%.

Conclusion

The Midlands is central to the UK physically and economically, but buyers should enter the market prepared to do considerable research.   With changing economic times, there is the potential for great investment in some parts of the region, but also some areas where returns could be more difficult to achieve.