Well done! You already knew that Leicester is in the Midlands. But did you know that Leicester is ‘in the middle’ in property terms too? That’s because Leicester has below average property prices – more like the north of England – but it’s far enough south to benefit from the more buoyant economy of the south-east of England.
Why Invest in Leicester?
Leicester is a fast-growing part of the country, which bodes really well for property investors. The city’s current population is around 350,000 but the local council expect it to grow to 388,000 by 2031 – an 11% rise.
Leicester has an industrial past, best known as a manufacturing centre for footwear, hosiery and textiles… it used to be said that Leicester clothes the world. Today it has a strong, modern economy based on light manufacturing, services and distribution – so good news for employment numbers and the property market.
Leicester is home to some of the UK’s biggest employers including Next, Sytner Group, Dunelm and Walkers who – and here’s a little known fact for you – operate the largest crisp factory in the world!
In fact, according to the Good Growth for Cities 2018 report from consultants PwC and Demos, Leicester’s economy is one of the top ten strongest in the country – right up there with Oxford!
More good news for the property market is that the University Hospitals of Leicester NHS Trust is one of the biggest and busiest NHS Trusts in the country, employing 15,000 people.
As you might expect, Leicester is a popular student city – it is apparently one of the most affordable student cities in the UK – so the student accommodation market is strong. The University of Leicester has around 17,000 students. De Montfort University or DMU has around 22,000.
Both Leicester universities have campuses on the fringe of the city centre with many student accommodation blocks here. Popular areas for privately rented student accommodation include Clarendon Park/Knighton, Stoneygate, North Evington/Evington, Highfields, Aylestone Park/Knighton Fields, Oadby, West End plus the city centre itself.
Leicester has all the big city shops, restaurants and cultural sights you would expect of a major city. But there’s also a strong visitor economy. Few people realise Leicester is a historic Roman city dating back to AD47. It’s also the resting place of Richard III.
Leicester is also a city where the rugby club Leicester Tigers is as famous as its football club Leicester City FC. Leicester is the place where you can have an out of this world experience too – the city is the home of the National Space Centre.
Leicester is famous for its Golden Mile, a stretch of Belgrave Road lined with Asian restaurants, jewellers and fashion boutiques. The Diwali celebrations here are said to be the largest in the world outside India.
As befits its middle of England location Leicester has great transport links, being right on the M1, M69 and A46. Birmingham can be reached by train in 47 minutes and London in around an hour.
Property Values in Leicester
Leicester property prices are well below the UK average. According to research by Hometrack, the average house price in Leicester is now £177,500, compared to £218,600 nationwide. Leicester prices seem to be on the up though. Again Hometrack says Leicester prices have risen 4.9% over the last year, compared to 2.2% nationally.
Look on property portals like Rightmove and Zoopla and you’ll find Leicester property prices start from around £60,000.
Rental Demand in Leicester
There’s a huge shortage of homes to rent in Leicester, which bodes well for property investors. This report says the local council is planning to buy up privately owned property to rent to its own tenants.
According to Leicester Property Insight, Leicester is the best place to invest in property in the UK. They explain that it offers an annual rental growth at 3.02% with accelerating growth year on year and an average rental yield of a modest 4.19% coupled with average house price growth of 6.28% – giving a total yield of a ‘whopping’ 10.47%.
If you’re looking to invest in shared accommodation or HMO investment Leicester City Council has an Article 4 Direction. This means that in some areas of the city, planning permission is needed to create an HMO. More details here.
Although it has not come into force yet Leicester is also planning a selective licensing scheme for landlords in some areas. Keep up with the latest on this here.
Investment in Leicester
The good news is that the Leicester property market is fairly easy to read. Generally, with a few exceptions, the cheaper houses are in the inner city areas, the suburbs have mid-market estate housing, while the fringes have desirable and more expensive commuter villages.
Worth knowing for property investors is that the area is divided between Leicester city and Leicestershire county for administrative purposes. This can affect council tax and the all-important school catchment areas. As well as the City of Leicester, Leicester area property can be located in the boroughs of Charnwood, Blaby, Harborough or Oadby & Wigston.
Here are a few pointers on the different areas of Leicester for property investors:
The City Centre
Average House Price: £180,300
Leicester has a small but well-established city living market with city living flats, some in a desirable waterside setting. City living could become a lot more popular here too. A huge regeneration scheme is underway plus a £500m five-year plan has recently been announced to build up to 3,000 more city living flats in the centre.
Interestingly the city centre currently has some of the cheapest property. That also means that in the LE1 postcode areas investors could expect a healthy 5% yield.
The Western Suburbs
Average House Price: £200,000-£290,000
The west side of Leicester is close to the M1 making it especially good for those who need motorway access. There are also large business parks close by providing lots of jobs. It’s an area that most appeals to families with suburbs including Glenfield, Thorpe Astley, Braunstone Town and Braunstone estate itself, a large post-war social housing estate.
Investors might expect yields here of 4% based on LE3, but less in LE19 with 3%.
North and North East Leicester
Average House Price: £200,000-£260,000
North and northeast Leicester contains a mix of property types, from cheap to pricey, so there are opportunities to be had here for property investors whatever their budget. It has inner-city suburbs including Highfields and St. Matthews, some of which are quite deprived. Beaumont Leys is a vast housing estate with its own large shopping centre and made up of several districts. Further out Thurmaston and Birstall are mid-priced residential areas while Groby and Anstey are popular villagey locations with great access to the city and M1.
Property investors could expect a yield of 3% based on LE5 and 4% based on LE4.
The Southern Suburbs
Average House Price: £260,000-£330,000
South Leicester, stretching out along London Road and Harborough Road, is probably Leicester’s most popular residential area with some of its smartest districts. Closer into the city places like Clarendon Park, Knighton and Stoneygate appeal to professionals – and also have a student market. Further out places like Wigston and Oadby are on the fringes of the Leicestershire countryside and are mid-upper priced areas that appeal to family buyers and tenants.
Yields based on the LE2 area are around 4% but a little further out in LE18 3% is more likely.
About our Data
Note. Population estimates are based on ward population information provided by Localstats. Current pricing levels are asking prices taken from Zoopla. Buy to let yields by postcode are taken from the Totally Money Buy-to-Let Rental Yield Map 2018/2019.