Areas of Chester: Buy-to-Let Property Investment Hotspots
The beautiful Roman city of Chester has a reputation for being exclusive and expensive. But if you know where to look there are still affordable property investments in Chester. Here’s our guide to the best areas of Chester to invest in buy-to-let.
Why Invest in Chester?
With origins dating back to at least AD70, Chester is a city with a rich history. It is the most complete walled city in Britain, and the Romans called it Deva.
Chester's population is now estimated to be between 88,725 and 119,900, with forecasts indicating it will grow by 5% between 2005 and 2021. The wider area, including Deeside and Wrexham in North Wales, has a population of around 357,700.
Chester's history makes it a popular tourist destination. The Chester area attracts millions of tourist visits a year, contributing £2 billion to the local economy.
Chester has a strong economy, with a vibrant job market and growing real incomes. Key industries include public services, financial services, and high-tech sectors such as biotechnology. Major employers include Bank of America Merrill Lynch, M&S Bank, and Airbus.
Chester is known for its excellent schools, leisure amenities, and strong wage levels, making it one of the best places to live in the UK.
The city has good transport links, with a free bus service from the train station to the city centre. It is close to the M56, M53, and A55, offering fast links to Manchester, Liverpool, and North Wales.
Chester offers a range of attractions, including the Grosvenor Park miniature railway, the largest Roman Amphitheatre in the country, the Eastgate Clock, and the Chester Rows—a unique arrangement of galleried, half-timbered shops. The city also boasts a vibrant food and drink scene, including the popular Jaunty Goat coffee shop and The Chef's Table, an award-winning gluten-free restaurant.
Chester Zoo, one of the largest in the UK, and Chester Races, held on The Roodee, attract thousands of visitors, boosting demand for holiday accommodation.
Property investors may be interested in the Chester Northgate scheme, which aims to create a leisure destination in the heart of the city with a cinema, new market, cafes, bars, restaurants, and co-working spaces.
Chester is also a university city, with around 19,00 students, offering opportunities in the student accommodation market.
Property Values
Chester experiences a high demand for housing, driven by a combination of residents, students, and tourists. However, the small size of the historic city centre limits the availability of space to build new properties, creating a shortage of supply. This dynamic has resulted in upward pressure on property prices.
The average property price in Chester has been £305,765 over the last 12 months. This represents a 2% increase compared to the previous 12 months. Another source puts the average property price in the city at £247,000, with a median price of £205,000.
The average price of an established property is £245,000, while a newly built property costs £324,000. Detached houses in Chester currently have an average price of £418,000 and flats average at £149,000.
The most affordable area in Chester is 'CH41 1', with an average property price of £65,300. In contrast, the most expensive area is 'CH64 7', with an average price of £1.0 million.
Chester's property market offers diverse options, from affordable shared rooms to luxurious apartments and detached houses. The city's desirability, limited space, and high demand contribute to its reputation as a property hotspot.
Average Asking Price by Postcode Area
Last updated: May 2024
Data from HM Land Registry
| Postcode District | Average Property Price |
|---|---|
| CH1 | £244,835 |
| CH2 | £302,828 |
| CH3 | £381,277 |
| CH4 | £293,511 |
Rental Demand
Chester's rental market has experienced dynamic changes, with a mix of rising and falling rents and evolving tenant preferences. Here is an overview of the latest trends and insights:
- Demand and Supply Dynamics: Chester has witnessed a persistent imbalance between rental demand and supply, with demand intensifying and a shortage of available rental properties. This has resulted in rising rents and a competitive market for tenants.
- National Context: The UK rental market has demonstrated resilience, with average rents rising by 7.2% in the last year and tenants now (as of February 2024) paying an average of £1,233 per month (£695 in the North East and £2,121 in London).
- Regional Perspective: The North West region, which includes Chester, has seen significant growth in rents. Over the past year, rents in the North West increased by 11.97% and over five years, rents have grown by 47.53%.
- Tenant Behaviour: The average rental property in the UK now receives approximately 25 enquiries from prospective tenants, a significant increase from the pre-pandemic average of eight enquiries. This heightened competition underscores the urgency for tenants to act quickly when arranging viewings and submitting applications.
- Landlord Opportunities: For landlords, the rental market dynamics in Chester present a promising outlook. Despite the increase in rental properties, rents continue to rise (albeit slower than they have been), indicating strong demand and potential for healthy rental yields.
- Market Outlook: While Chester's rental market remains competitive, signals suggest a potential deceleration in the annual growth of rental prices, which is both in line with the national trend and a result of additional rental housing stock.
Average Rental Yield by Postcode Area
Rental yield is the rental return an investor can expect on their investment once costs have been taken into consideration.
Last updated: May 2024
| Postcode District | Average Rental Yield |
|---|---|
| CH1 | 4.9% |
| CH2 | 4.0% |
| CH3 | 3.6% |
| CH4 | 4.8% |
Landlord Licensing
Cheshire West and Chester Council require HMO landlords to have a licence (as is mandated nationally) but have extended the conditions of that licence. They also use Article 4 directions to control the conversion of standard housing into HMOs.
Landlords should note that the Housing Act 2004 empowers local authorities to introduce selective licensing for privately rented homes to address specific issues in their areas. At the time of writing (May 2024) Cheshire West and Chester Council have not introduced selective licensing, however, landlords who are thinking about investing in property in Chester should always look for any new announcements before acting.
HMO Licensing
Under the Housing Act 2004, all landlords owning larger HMOs that are 3 stories or more and house 5 or more people from two different households must have a licence for the property. This rule applies nationally across England and Wales, although the administration of such licences falls to the local authorities.
Local authorities also have the power to extend the scope of these licences (called Extended Mandatory Licensing), should they feel such an extension to be of benefit and this is what Cheshire West and Chester Council have decided to do.
As such, HMO landlords in Chester will need an HMO licence if their HMO houses 5 or more people from two or more households but instead of applying only to HMOs of 3 or more stories, it applies to buildings of any number of stories, including 1 or 2.
Article 4 Directions
The Cheshire West and Chester Council implemented Article 4 Directions in areas of Chester to control the conversion of properties into Houses of Multiple Occupation (HMOs). This measure requires planning permission for converting a property into a small HMO (between three and six occupants).
Article 4 directions apply in Newry Park, King Street and the Garden Quater.
Landlord Accreditation Schemes
Landlords in Chester can join the voluntary Cheshire Landlord Accreditation Scheme. This aims to raise standards in the private rented sector. Accredited landlords and letting agents are recognised for providing good housing management and property standards, giving them a market advantage.
By being a member of this scheme, landlords may also be eligible for a 10% discount on the mandatory HMO licence.
Holiday Lets and Airbnbs
Chester is a popular tourist destination, attracting visitors with its rich history, picturesque scenery, and vibrant culture. Running a holiday let or Airbnb in the city can be a lucrative venture, given its enduring appeal. Here are some insights and considerations for those interested in entering the short-term rental market in Chester:
- Demand: Chester experiences strong demand for short-term rentals, particularly during the summer months and school holidays. The city's popularity, proximity to Liverpool and Manchester, and its range of attractions make it an ideal destination for domestic and international travellers.
- Competition: There is competition from other holiday lets and Airbnbs in the area, with 955 available vacation rental offers in Chester, according to CozyCozy. However, the demand is high, and with the right property and effective marketing, your occupancy rates can be high.
- Property Types: The most common types of holiday rentals in Chester include apartments, cottages, houses, and barns. Apartments are the most abundant, accounting for 40.33% of the market. However, there is also demand for unique properties like converted chapels, barns, and cottages.
- Amenities: To stand out in the market, consider offering additional amenities that cater to your target audience. For example, families may appreciate properties with gardens, free parking, and access to washing machines. Pet-friendly accommodations are also in high demand, as are properties with hot tubs and private pools.
- Location: The most desirable locations for holiday lets in Chester include the city centre, Great Boughton, Handbridge, Westminster Park, and Upton Heath. These areas offer easy access to popular attractions and provide a mix of historic charm and modern conveniences.
- Pricing: Holiday let prices in Chester vary depending on the season, property type, location, and amenities. The average nightly rate is £131 in the summer, while the average weekly rate is £916. The most expensive month is August, with an average nightly rate of £194.
- Regulations: It is essential to familiarise yourself with local regulations and obtain any necessary licences or permits. Chester City Council has specific guidelines for short-term rentals, including health and safety requirements, waste management, and planning permission for certain types of properties.
The Best Places to Live in Chester
Chester offers a variety of desirable neighbourhoods, each with a unique character and appeal. Here is a list of some of the best places to live within the city and its surrounding areas:
- Hoole: A vibrant village with a mix of independent shops, eateries, parks, and highly-rated primary schools. The mainline station is within walking distance, providing easy access to other areas, including London, which is just over a 2-hour train journey away.
- Queens Park: Home to the High School, Queens Park is a desirable area for families. Residents enjoy a pleasant stroll into the city centre, passing by shops, restaurants, and pubs.
- Curzon Park: This area boasts some of Chester's most beautiful properties, particularly those with gardens that run down to the river. Curzon Park is a short walk from the city and consists exclusively of private residential houses and apartments.
- Handbridge: A sought-after area known for its excellent schooling and brilliant transport links into the city. It is a short walk across the River Dee to the city centre.
- Upton: Located north of the city, Upton offers a mix of late Victorian to 1930s properties. It provides easy access to supermarkets and schools, with good transport options, including a 15-minute bus ride into the city.
- Great Boughton: A modern suburb with a range of housing options, including townhouses and detached homes.
Westminster Park: A family-oriented area with plenty of apartments and green spaces. - Christleton: A picturesque village with excellent amenities, including a sports centre, swimming pool, shops, pubs, and highly-regarded primary and secondary schools. It has been named the best-kept village in Cheshire multiple times.
- Waverton: A small village located about 5km from Chester, with the Shropshire Union Canal running through it. Waverton has a post office, shops, and a primary school. It is also home to the popular outdoor children's adventure attraction, The Crocky Trail.
- Boughton: Much of this neighbourhood is located on the steep banks of the River Dee, offering impressive views. Boughton provides three parades of shops and amenities, including a well-regarded primary and secondary school. It has a frequent bus service into the city centre.
- Tarvin: A picturesque village with a range of amenities, including shops, restaurants, pubs, a church, a doctor's surgery, and a veterinary practice. Chester is only 5 miles away, and Tarvin offers an excellent state primary school. Its location makes commuting to nearby areas like Warrington and Manchester convenient.
- Lache Lane: One of Chester's most attractive areas, known for its large properties and strong community spirit. It is convenient for those wanting access to the private hospital, Chester Racecourse, and Chester Business Park, all within walking distance of the city centre.
- Tarporley: A sought-after village with plenty of amenities, including pubs, shops, health centres, and highly-regarded schools. It has a vibrant community and is known for its beautiful countryside.
- Tattenhall: A popular village with a mix of independent shops, eateries, and pubs. It boasts excellent schools, a vibrant community, and easy access to the city.
Property Investment in Chester
Chester city centre has a small but busy city living property market. With all the shops, amenities and tourist sites right on the doorstep, it offers strong buy-to-let potential for residents, students, tourists and visitors on short-term lets. The city centre offers a wide range of property types too, including traditional terraces, smart period houses, the black and white mock Tudor buildings for which Chester is famous and city living apartments in either conversions or new-build blocks.
Surrounding the city centre Chester suburbs include Boughton or Great Boughton, Curzon Park, Handbridge, Newton, Piper’s Ash, Queen’s Park, Upton and Vicars Cross. Hoole (sometimes nicknamed Notting Hoole after Notting Hill in London) is particularly popular and known for its bars, restaurants and independent shops and has been voted as having one of the best high streets in the country. Investors in these areas can choose from a range of property types including traditional terraces and townhouses, family semi-detached homes plus some exclusive detached homes that are amongst Cheshire’s most expensive properties.
While all the Chester suburbs are popular residential areas investors should consider ease of access to the city centre, access to the local road network and of course the all-important school catchment areas. Chester can suffer from traffic congestion so areas that are walkable to these amenities tend to be most popular with tenants.
Areas a little further out can offer good opportunities to property investors. They are generally cheaper property areas than the inner suburbs. Although not quite so convenient for the city centre they also offer good access for commuters and those who work at Chester Business Park and at the many employment sites on Deeside.
Westminster Park is a smart suburb with good access to the city, Chester Business Park and the A55. Nearby a brand new suburb, the Kings Moat Garden Village supplies around 1,300 new homes.
Saltney is a small town with its own local amenities to the south of Chester itself, with part of the town actually being across the border in Wales. It has good value property compared to much of Chester.
Lache to the south of Chester, and Blacon to the west of the city, itself, are large purpose-built housing estates. They have some of Chester’s cheapest house prices which have made them attractive to budget buy-to-let investors.
Further out, beyond the A55 and especially to the south and east of Chester, many of the small villages are upmarket Cheshire residential areas. They are generally high property price areas.
Other Areas To Consider
Property investors interested in Chester might also look at locations on Deeside, such as Hawarden, Queensferry, Shotton and Connah’s Quay together with Wrexham across the border in Wales. These areas generally have much lower property prices than Chester. Here’s our guide to the best areas of Wrexham to Invest in buy-to-let.