Property Investment and Buy-to-Let in South Wales

The Best Areas of South Wales To Invest in Buy-to-Let

South Wales just has to be one of the most varied and exciting regional property markets for property investors. Property investors in South Wales can choose from city property, suburban property, student property, holiday property together with the cheapest buy to let property anywhere in the entire UK! Here’s our guide to the best areas of South Wales to invest in buy-to-let.

Why Invest in South Wales?

The South Wales region is the biggest part of Wales by far with the biggest property market. Three-quarters of Wales’ population – that’s 2.2 million people – live in South Wales.

Cardiff, Swansea and Newport are the main cities of South Wales. Just to the north, the South Wales Valleys have mainly ex-industrial towns and villages with many cheap property opportunities. Areas like Monmouthshire, Pembrokeshire and Carmarthenshire are more rural.

The counties of South Wales are Blaenau Gwent, Bridgend County, Caerphilly, Cardiff, Carmarthenshire, Merthyr Tydfil, Monmouthshire, Neath & Port Talbot, Newport City, Pembrokeshire, Rhondda Cynon Taff, Swansea, Torfaen and Vale of Glamorgan. You can check which council area applies to any South Wales property, here.

South Wales was once a heavy industrial area but the economy has been transformed in recent years and is based around manufacturing and services. Cardiff has enjoyed one of the strongest economies in the UK in recent years – the economy here has grown faster than London!

South Wales’ low property prices are actually a big advantage, not a disadvantage. They make it an attractive place for businesses to expand and relocate. South Wales good news stories include the National Digital Exploitation Centre which has already put £1 million into the Valleys area, while sports car maker TVR is building a new factory here and INEOS are planning to build a new 4x4 vehicle at Bridgend.

The South Wales economy has been boosted by the removal of tolls on the Severn Bridge in 2017. This article says property prices are rising as a result.Property investors should also keep an eye on plans for the South Wales Metro. This is an exciting scheme to make South Wales public transport some of the best in the world.

There’s a large student accommodation sector in South Wales. In Cardiff, Cardiff University has around 30,600 students, the University of South Wales has around 25,000 students and Cardiff Metropolitan University has 11,500 students. In Swansea, Swansea University has around 21,000 students and the University of Wales Trinity Saint David has around 10,000 students. The University of South Wales has Newport City Campus in Newport.

Property Values in South Wales

The average house price in the UK is currently £234,742, according to HM Land Registry figures. But the average house price in Wales is currently just £161,719.

Average house prices in the different counties of South Wales are as follows: Blaenau Gwent £87,977. Bridgend County £157,004. Caerphilly £141,838. Cardiff £216,063. Carmarthenshire £152,326. Merthyr Tydfil £106,332. Monmouthshire £275,656. Neath & Port Talbot £123,172. Newport City £188,998. Pembrokeshire £176,096. Rhondda Cynon Taff £113,747. Swansea £152,423. Torfaen £148,320. Vale of Glamorgan £225,139.

With an average house price of just £87,977, Blaenau Gwent is the cheapest place to invest in property in the entire UK. According to Rightmove, you can currently buy property here from just £29,000.

A photograph at sunset taken of an elevated view of the Pembrokeshire coastline with boats in a natural harbour.

Rental Demand in South Wales

South Wales overall has good demand for rented property, with different buy to let markets in different areas. In some places, the demand for buy-to-lets is from the local market. In other parts of South Wales, investors could look at holiday lets or student lets.

Buy to let landlords across Wales as a whole can expect to earn £650 a month from an average rental property according to Homelet. Rents rose 5.5% over the last year.

Attractive rents but below UK average property prices mean South Wales can offer good investor yields often well above 5%. Average letting yields in South Wales, according to LiveYield, are as follows: Blaenau Gwent 5.5%. Bridgend County 5.3%. Caerphilly 5%. Cardiff 5.3%. Carmarthenshire 3.6%. Merthyr Tydfil 4.8%. Monmouthshire 3.5%. Neath & Port Talbot 4.8%. Newport City 5.3%. Pembrokeshire 3.7%. Rhondda Cynon Taff 5.5%. Swansea 4.4%. Torfaen 3.9%. Vale of Glamorgan 5%.

Property investors should find that student property yields and holiday property yields are much higher of course.

Property Investment in South Wales

Here’s our guide to property investment in some of the main cities and towns of South Wales.

Cardiff

Population: 357,200
Average House Price: £216,063

Cardiff (Caerdydd) is the capital of Wales and its biggest city by far. It’s growing fast too – official figures say Cardiff will grow by 20% by 2035 as people move from around Wales into Cardiff.

Cardiff has Wales’ strongest economy. The city has a service economy with well-paid jobs in health, education and public administration, financial and business services, ICT, tourism, a growing digital and bioscience sector and a TV, film and media industry too.

Some plans which should grow the Cardiff economy in future include the Cardiff Capital Region City Deal which will invest £1.2 billion in the area, Central Square and Central Quay.

Cardiff’s growing economy means prices and rents here have risen fast in recent years so Cardiff is one of the most expensive places to buy property in South Wales. However, it’s still possible to buy property in Cardiff from £60,000 upwards.

See: The Best Areas of Cardiff To Invest in Buy-to-Let.
See: How to Sell Your House Fast in Cardiff

Swansea

Population: 245,000
Average House Price: £152,423

Swansea (Abertawe) is Wales’ second-largest city. Originally a port and heavy industrial city today the main Swansea industries are services such as professional and financial services, tech., communications, life sciences, marine industries, creative industries, health, education and public administration – including the DVLA which employs 6,000.

There’s been some exciting regeneration in Swansea including the Maritime Quarter, Swansea Marina and SA1 Waterfront. In the future, the Swansea Bay City Deal could bring a £1.27 billion investment into Swansea.

As well as the local residential property market Swansea has a student property market and the area also attracts tourists so there is a demand for visitor accommodation. Swansea is one of the few cities to have a beach and the Gower Area of Outstanding Natural Beauty is nearby.

See: The Best Areas of Swansea To Invest in Buy-to-Let
See: Sell Your House Fast in Swansea

Newport

Population: 151,000
Average House Price: £188,998

Newport (Casnewydd) is the third-largest city in Wales, having been granted city status in 2002.

Newport was traditionally a heavy industrial town. Today Newport’s main employers are services including Admiral Group, Go Compare and government departments such as the Intellectual Property Office and Office for National Statistics. The Friars Walk retail scheme has helped to regenerate the city centre and the Celtic Manor Resort and new International Convention Centre Wales are attracting more visitors. £1 billion is being invested in a whole new suburb at Glan Llyn.

Newport is a low property price area compared to much of the UK. But this national press report says that the property market in this part of Wales is on the rise thanks to a mini exodus of house buyers from Bristol into Newport.

See our article on the best areas of Newport to invest in buy-to-let.

Bridgend

Population: 40,000
Average House Price: £157,004

Bridgend (Pen-y-Bont ar Ogwr) is halfway between Swansea and Cardiff and has good road and rail connections to both. It is a manufacturing and light industrial town. A major employer – Ford’s Bridgend Engine Plant – closes this year but it is hoped new companies such as INEOS and others will create new jobs. Bridgend is also a largely residential town with some good value property.

Photo of Ogmore Castle with a rainbow in the background

Cwmbrân

Population: 48,500
Average House Price: £148,320

Cwmbrân, in the county borough of Torfaen and close by Pontypool, is in the Valleys area just north of Newport and Cardiff. Cwmbrân was developed in the 1950s as a new town. It is a light manufacturing and logistics centre. Employers include Burton’s Biscuits which manufactures 40,000 tonnes of biscuits a year and manufacturer of aircraft seats Safran Seats. It is a good value property area.

Llanelli

Population: 49,500
Average House Price: £152,326

The town of Llanelli is in Carmarthenshire to the west of Swansea. It is a light manufacturing centre but also a Swansea commuter town. Swansea is 20 minutes away by road and just 15 minutes by train.

Merthyr Tydfil

Population: 44,200
Average House Price: £106,332

Merthyr Tydfil in the Merthyr Tydfil county borough is in the Valleys area, around 23 miles north of Cardiff and on the fringes of the Brecon Beacons National Park. It is a post-industrial town and today’s employment is mostly in light industry and services. The Merthyr Tydfil economy has struggled in recent times and as a result, the town has some of the cheapest property not only in Wales but the whole UK.

About Our Data

Note: Population estimates are based on information provided by Localstats. Current average asking prices are taken from HM Land Registry data and Zoopla. Buy-to-let yields by postcode are taken from LiveYield.