First things first: The really important thing to know about investing in Nottingham property is that it offers some of the cheapest property of any UK city – and so some of the best yield potential for landlords and buy to let investors. More detail on that coming up shortly, but first…
Why Invest in Nottingham?
Look at Nottingham today and you’d scarcely realise it has an industrial past being a one-time world leader in – of all things – lace making, bicycles and (legal) drugs. Today its main industries are future-orientated ones like financial and business services, logistics, advanced manufacturing, clean technology, life sciences and digital – according to a local press report, the city’s new Creative Quarter has created 1,000 new jobs already.
Mark Carney, Bank of England Governor, has previously called Nottingham a bellwether for the UK economy. He meant that Nottingham is a leading example of a city which is successfully transitioning to a new, modern economy.
Parts of Nottingham have Enterprise Zone status and are home to some really exciting new start-up industries. Just announced is an £8 million hub at the Boots’ Enterprise Zone to help bring new medical technologies to market.
Nottingham is home to not just one but two universities, meaning there is a large student property market. The University of Nottingham has 32,000 students and Nottingham Trent University has 25,000. Another noteworthy Nottingham institution is the Queen’s Medical Centre. QMC is a regional ’super hospital’ and the largest teaching hospital in the UK. Six thousand people work here, creating a massive demand for property to buy and to rent.
Nottingham is often described as the place that’s big enough to offer a city lifestyle (population: 329,200), but small enough to still be human-sized and personal.
Nottingham is very much the capital of the East Midlands and its biggest centre for shopping, leisure, culture and sport. The city also has a growing visitor economy with 267,000 visits a year thanks to the legend of Robin Hood and more contemporary attractions including Nottinghamshire Country Cricket Club’s Trent Bridge ground – world famous in cricket circles.
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Buy-to-lets near tram stops have lots of appeal to tenants and some reports, like this one from Lloyd’s, say tram lines also boost Nottingham property prices.
Property experts tip anywhere on the future HS2 network as good for house prices. Nottingham’s HS2 station will be at Toton on the Birmingham-to-Leeds section of the line.
Property Values in Nottingham
According to Hometrack, Nottingham is one of the cheapest cities in England – only Liverpool, Sheffield and Newcastle have lower prices. The current average price of £151,800 across the area as a whole represents a 5.2% rise over the year or 42.5% over the last decade.
Nottingham itself is spread over several different local authority boroughs including the City of Nottingham plus Rushcliffe, Gedling, Broxtowe and Erewash.
If you aren’t sure which council a property falls under you can find out by entering the postcode at www.gov.uk/council-tax-bands.
By the way, much of the City of Nottingham area has a selective licensing scheme for landlords on all rental property. So it’s as well to check what this involves before you start looking for Nottingham buy-to-lets.
This article in the Nottingham Post, quoting a local letting agent, says that the Nottingham rental market is performing well and is boosted by the city’s large student population and contract workers at the city’s hospitals, universities and major companies.
It’s also worth knowing that, according to this report on a recent Totally Money survey of the ‘top 20’ yields in the country Nottingham takes first as well and fifth place. NG7 is the fifth best yielding postcode offering 8.89% while NG1 is the top yielding location with 11.99% – nowhere in the UK currently offers better yields.
(But bear in mind achieving these yields will depend on the actual price you pay for your buy-to-let and the rent you can charge.)
Investment in Nottingham
Here we’ll look at a few of the most popular areas for Nottingham property investments, and at prices and what sort of rental yields you might expect.
Average House Price: £194,000
There are several different student property areas in Nottingham as there are campuses across the city. Generally, though Lenton and Dunkirk tend to be the most popular areas for University of Nottingham students. The city centre and Arboretum district tend to be most popular with Nottingham Trent University students. Radford also attracts some students as it’s cheaper.
Average prices are £220,705 in Lenton (reflecting its popularity for student houses), £184,938 in Dunkirk and £175,825 in Radford. It’s in these districts (based on the NG7 postcode) where Totally Money say 8.89% yield is possible.
Population: 8,000 approx.
Average House Price: £169,716
Compared to some cities Nottingham doesn’t have a massive city living market but more people are discovering the benefits of living close to work and the Nottingham city centre amenities. There are new build blocks, period conversions and townhouses to choose from. Popular spots are Hockley in the Creative Quarter, especially the Lace Market area, the city end of Derby Road as well as The Park.
A city centre apartment could be expected to earn a 5-6% yield.
Average House Price: £120,000
Nottingham’s inner city suburbs are where the city’s lowest priced housing is found. Excluding Radford and Lenton these areas include Hyson Green, St.Ann’s, The Meadows and Sneinton. It’s worth noting that all these areas receive a lot of coverage in the press for their social issues, but they appeal to investors looking for cheap buy-to-lets.
Average prices (NG1 postcode) range from around £116,000 in Sneinton to around £124,000 in St.Ann’s. It is NG1 where Totally Money say 11.99% yield is possible.
The Southern Suburbs
Average House Price: £259,072
Beeston is one of Nottingham’s most popular and fashionable residential areas. As well as having Nottingham University, QMC, Nottingham Science Park and the Boots’ Company site on the doorstep it has great accessibility. It is close to the M1, has tram links around the city plus four mainline trains hourly taking just 10 minutes into the city centre. Beeston is in the Broxtowe Borough rather than the City of Nottingham, as such.
The good accessibility and popularity of this area are reflected in house prices. The average price in Beeston is £259,072 and yields (based on NG9) are 4%. Nearby, Stapleford (£208,569) and Chilwell (£221,577) are cheaper but also popular for Nottingham buy to lets.
Average House Price: £276,896
West Bridgford sits just across the River Trent from Nottingham city centre in the Rushcliffe Borough. It’s an upmarket location – sometimes called the Chelsea of Nottingham – and it’s popular with more affluent city centre commuters and especially families.
As you might expect, West Bridgford and the Rushcliffe Borough, generally, is one of the priciest areas around Nottingham. That means tight yields of 3% are normal.
Average House Price: £164,437
Long Eaton is close to Nottingham but technically is in the Erewash Borough or Derbyshire. It is popular with families, those who work in either Derby or Nottingham, those who want good access to the M1 – as well as workers at East Midlands Airport and the nearby logistics parks.
Long Eaton is a good value area for property prices. Average prices in the Erewash Borough as a whole are £164,437 and yields (based on NG10) are 4-5%.
North East Nottingham
Average House Price: £185,896
Suburbs to the northeast of the city include Carlton, Arnold, Sherwood (don’t expect to find the famous Sherwood Forest here though, it isn’t), Mapperley and the smart Mapperley Park… A stereotypical leafy suburb. They’re all popular family suburbs in the mid or mid-higher property brackets. Part of northeast Nottingham is in the Gedling Borough rather than the City of Nottingham itself.
The likely yield here (NG3, NG4 and NG5) is 4-5%.
North West Nottingham
Average House Price: £162,500
Northwest Nottingham consists of mainly residential suburbs with many large housing estates. Within that, there’s a real mixed bag of local authority/social housing, ex-local authority and privately owned properties. Buy-to-let investors can find good value here but you’ll need to check out what rental demand and likely rents are possible in the particular areas you’re looking at.
Average prices range from around £131,000 in a cheaper area like Bulwell to £194,000 in a higher priced one like Bilborough.
Expect yields (based on NG6 and NG8) in the 3-5% range.