Areas of Portsmouth: Buy-to-Let Property Investment Hotspots
Portsmouth is very much a city of the sea. It is the home of the Royal Navy, one of the country’s biggest commercial ports and - a little known fact - it is Britain’s only island city. That makes Portsmouth very much a unique city, and a unique city for property investors too.
Why Invest in Portsmouth?
Portsmouth is an attractive prospect for investors due to its unique characteristics and strong economic outlook. Here's why you should consider investing in this dynamic city:
Portsmouth is a unique waterfront city, located on Portsea Island, with a proud maritime history and a global reputation in marine, technology, aerospace, defence, and advanced manufacturing. The city is home to the Royal Navy and one of the UK's busiest commercial ports, supporting a large number of jobs. Portsmouth International Port provides key ferry routes to France, Spain, and the Isle of Wight, further enhancing its economic significance.
The city's economy is robust, with a forecasted growth rate of 17% in the next five years, outperforming UK and London forecasts. Portsmouth's diverse economy is centred around shipping, maritime activities, and defence industries. Major employers include BAE Systems, Pall Europe, and IBM, with the Royal Navy and related contractors supporting over 20,000 jobs. The presence of the Royal Navy's two new large aircraft carriers will further boost the local economy for decades to come.
Portsmouth's population of around 207,000 makes it the most densely populated city in the UK after London. Its island location means land is limited, supporting the property market and creating a demand-supply imbalance. The city's housing market is undersupplied, with an annual shortfall of around 1,000 homes, which is expected to drive property prices and rents upwards.
The University of Portsmouth adds to the city's appeal, with a student population of around 25,500. The university is investing £400 million to expand its facilities, and popular student accommodation areas include Southsea and Fratton, within walking distance of the university.
Portsmouth's historic status and coastal location attract visitors year-round, with attractions such as the Spinnaker Tower, the National Museum of the Royal Navy, and the Mary Rose Museum. The city's seaside suburb, Southsea, is a popular coastal resort.
Portsmouth has exciting regeneration projects underway, including the Southsea Coastal Scheme, which combines coastal defence improvements with community development. The city is also developing Tipner West, creating a unique marine employment hub.
Portsmouth's accolades include being named the UK's second coolest city to live by Nomads Nation in 2023, praised for its up-and-coming areas and regeneration projects. The city has also been recognised for its strong economic growth.
In summary, Portsmouth's unique location, robust economy, and diverse attractions make it an appealing prospect for investors seeking strong returns and long-term growth.
Transport Links
Portsmouth has an extensive transport network, making it easy to get around the city and beyond.
The city has a well-developed bus network, with two main operators: Stagecoach and First Bus. National Express and Megabus also provide long-distance coach services from The Hard in Portsea, next to Portsmouth Harbour train station. Portsmouth City Council operates a Park and Ride bus service, providing easy access to the city centre, Gunwharf Quays, and the Spinnaker Tower.
Portsmouth has strong rail connections, with four mainline railway stations: Portsmouth Harbour, Portsmouth and Southsea, Fratton, and Hilsea. The city has direct rail links to London, Southampton, and both the southeast and southwest coastal routes. The direct train to London takes approximately one and a half hours.
For air travel, Portsmouth is conveniently located near several airports. London's Gatwick and Heathrow airports are both around 60 miles away, with good rail and coach connections. Southampton International Airport is just 22 miles away, and Bournemouth International Airport is 50 miles from Portsmouth, offering flights to European destinations.
Ferry and hovercraft services are also available, with connections to the Isle of Wight, Gosport, and Hayling Island. Portsmouth International Port serves around 3.5 million people each year and is the closest UK port to London and Paris.
Portsmouth is part of the UK's pilot scheme for e-scooters, with Voi Rental E-scooters available for hire. The city also has a bike-sharing scheme, with Beryl Bikes available from 90 bays across the city.
Property Values
Property values in Portsmouth offer a more affordable option when compared to the wider South East region. According to the data from April to May 2024, the average house price in Portsmouth is £235,879, which is significantly lower than the regional average of £319,000.
However, property prices in Portsmouth vary depending on the specific area and property type. The average price of a detached property in Portsmouth is £509,000, while a semi-detached property averages £341,000, and terraced properties sell for around £264,000. Flats and maisonettes are more affordable, with an average price of £175,000.
The postcode area 'PO1 3' has seen a median price per square metre of £3,570, with half of the properties sold within a range of £3,100 to £4,160 per square metre.
The most affordable area in Portsmouth is 'PO1 4', with an average property price of £168,000, while the most expensive area is 'PO17 6', with an average of £1.1 million.
Portsmouth's property market has experienced fluctuations, with a 6% decrease in average house prices from February 2023 to February 2024. Despite this, property values have risen over the last decade, with a reported increase of 45.6% over the past ten years.
In summary, Portsmouth offers a range of property options, from affordable flats to upscale detached houses, providing investors with opportunities to cater to various budgets and preferences.
Average Asking Price by Postcode Area
Last updated: July 2024
Data from HM Land Registry
Postcode District | Average Asking Price |
---|---|
PO1 | £270,029 |
PO2 | £247,228 |
PO3 | £280,166 |
PO6 | £281,012 |
Rental Demand
Rental demand in Portsmouth remains strong, with the average monthly rent rising to £1,253 in March 2024, an annual increase of 12.8% from £1,111 in March 2023. This growth is expected to continue, albeit at a slower pace, with rents predicted to rise by 4% in 2023.
Portsmouth's rental market offers a range of opportunities for investors, catering to various tenant types. The city has a large student population, with the University of Portsmouth creating a high demand for student accommodation.
The city also attracts young professionals and families, with its thriving economy and good transport links. The average UK tenant spends around 39.1% of their monthly income on rent, and Portsmouth's relatively affordable rents make it an attractive option for those seeking value.
Portsmouth's rental market is influenced by a demand-supply imbalance, with a limited number of rental properties available. This imbalance is expected to continue, putting upward pressure on rents.
The city's rental yields are also attractive to landlords, with yields that can easily achieve yields ranging from 6.6% to 8.1% in some areas.
Portsmouth's rental market is expected to remain robust, with a growing population, a strong local economy, and a limited housing supply driving rental demand.
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: July 2024
Postcode District | Average Rental Yield |
---|---|
PO1 | 5.6% |
PO2 | 5.6% |
PO3 | 5.6% |
PO6 | 4.6% |
Landlord Licensing
Portsmouth City Council requires that HMO landlords have a license and runs a licensing scheme for HMOs that is additional to the mandatory HMO licence required, as standard, across England and Wales. The Council also has Article 4 Directions in place across the city.
It should be noted that the Housing Act 2004 introduced the concept of selective licensing, which allows local housing authorities to implement schemes requiring all private landlords in a designated area to obtain a licence to rent out residential properties. Portsmouth City Council has not yet implemented selective licensing but it has been a topic of discussion and debate among councillors so such a scheme may be introduced at some point in the future.
Standard HMO License
Portsmouth City Council does have mandatory HMO licensing in place, requiring landlords of HMOs to obtain a licence. For the purposes of this licence, an HMO is defined as a property where five or more unrelated people share a kitchen and/or a bathroom.
This licence, though handled by the Council, is a nationwide mandatory licence for HMOs.
Additional HMO License
Portsmouth City Council introduced an additional licensing scheme for smaller HMOs (3-4 occupants) on 1 September 2023, requiring these properties to obtain a licence. This scheme is separate from the mandatory licensing for larger HMOs (5+ occupants).
Article 4 Direction
Portsmouth City Council implemented a city-wide Article 4 Direction on 1 November 2011, which means that planning permission is required to change the use of a Class C3 dwelling house to a Class C4 HMO (3 people).
This Article 4 Direction removes the permitted development rights that would usually allow such a change without planning permission.
The PDPLA
The Portsmouth and District Private Landlords Association (PDPLA) is an association of local landlords that aims to represent, educate, and inform its members. They meet monthly to share information and represent the interests of landlords to local and national governments.
The Best Areas to Live in Portsmouth
Portsmouth offers a range of desirable areas to live in, catering to different preferences, budgets, and lifestyles. Here are some of the best areas to consider:
- Southsea: This trendy area is known for its lively atmosphere, coastal views, and abundance of local events. Southsea is packed with students and offers a mix of Victorian and Edwardian architecture, with properties ranging from terraced houses to modern apartments. It's within walking distance of the University of Portsmouth, and Southsea Common hosts various events, including the Portsmouth Kite Festival.
- Old Portsmouth: This historic area is the original 18th-century city location, featuring large townhouses with fascinating histories and original features. Properties here sold for an average price of £368,567 over the last year.
- Gunwharf Quays: This contemporary development offers luxury apartments with spacious living areas, modern fittings, terraces, and balconies. Residents enjoy direct access to the marina and the Spinnaker Tower, as well as an array of retail and leisure amenities.
- Fratton: Fratton is a sought-after area for students and young professionals due to its lively scene, proximity to the university, and wealth of popular pubs and restaurants. It offers good transport links and has excellent green spaces like Kingston Park.
- Milton: Milton appeals to those seeking a balance between city life and green spaces. It is home to Milton Common and Milton Park and just around the corner from Eastney's popular beachfront. The University of Portsmouth's Langstone Flats is also located here.
- Eastney: Eastney is ideal for final-year students who want a quieter experience. It has a stretch of beach and a homely feel, with a beloved collection of local shops and cafes.
- City Centre: Portsmouth's city centre is the hub of the city's action, with popular bars, restaurants, clubs, and shopping centres. It's home to the university, and its excellent transport links make getting around super easy.
- Stamshaw: Stamshaw is a residential district located on the northwestern corner of Portsea Island. It consists of terraced housing built for dockyard workers and their families. Stamshaw is sought-after by first-time buyers and young families, with an average property price of around £248,019 over the last year.
- Hilsea: Located at the northern end of Portsea Island, Hilsea is known for its nature reserve and the Hilsea Lido. It has a mixture of residential and industrial areas, with good transport links, including a small train station. The property prices in Hilsea have averaged £255,082 over the last year.
- Cosham: Cosham is a northern suburb with modern housing estates, newly built properties, and 1920s-30s semis and terraces. It's a great spot for families seeking spacious homes with good schools nearby. The property prices in Cosham have averaged £326,794 over the last year.
- Drayton and Farlington: Unlike most of the city, Drayton and Farlington are located on the mainland. They offer a variety of properties, including newly built developments, with excellent access to major roads and motorways.
- Paulsgrove: Paulsgrove is an area in northern Portsmouth on the mainland. It has a mix of semi-detached and terraced properties, making it attractive to first-time buyers and young families. It has good local amenities, including a primary and secondary school. Property prices in Paulsgrove have averaged £276,878 over the last year.
Property Investment in Portsmouth
Here’s our guide to buy-to-let in and around Portsmouth.
Portsmouth City Centre
Population: 12,000
Average House Price: £250,000
Portsmouth city centre has a fairly small city living market but it appeals to those who want to be close to the city amenities and transport links. There have been a number of student blocks built in recent years too. Investors can choose from new-build blocks, some apartment conversions and traditional terraces. Gunwharf Quays to the west of the centre is a smart development with shops, dining and leisure facilities plus city living apartments.
Yields in this area, based on the PO1 postcode, are 6.1%.
The Suburbs
Population: 190,000
Average House Price: £150,000 - £290,000
Portsmouth suburbs include Portsea, Old Portsmouth, Somers Town, Southsea, Eastney, Fratton, Milton, Baffins, Kingston, Landport, North End, Bucknor and Copnor on Portsea Island. There are also what are known as the off-island districts of Highbury, Port Solent, Cosham, Drayton and Farlington on the Hampshire mainland.
The Portsmouth suburbs offer a range of property investment opportunities including traditional terraces, apartments, private and social housing estates plus some prestigious properties with sea views in some locations.
Old Portsmouth is the most historic area of the city and has become a popular residential spot. Southsea is Portsmouth’s own seaside suburb complete with beach, promenade and two piers. Southsea is a popular residential location, especially with families, with much Victorian and Edwardian property. In recent years some of Southsea’s one-time guest houses have been converted to HMO accommodation. Fratton is a good value property area with good access to the city centre and its own railway station.
Yields in this area, based on PO1 to PO6 postcodes, range between 4.1% - 5.6%.
Havant
Population: 125,000
Average House Price: £270,000 - £330,000
Havant is a separate town to the north of Portsmouth itself. It includes the settlements of Purbrook, Waterlooville and Cowplain plus nearby Horndean and Clanfield. It has good local amenities and also good transport links into Portsmouth as well as to other parts of Hampshire and also West Sussex via rail, the M27, A27 and A3(M) roads.
Havant has expanded fast in recent years and is a popular residential location for those who commute into Portsmouth and further afield.
Yields in this area, based on PO7 to PO11 postcodes, are around 4% on average.
Gosport
Population: 90,000
Average House Price: £230,000 - £260,000
The town of Gosport is across Portsmouth Harbour from Portsmouth itself. Gosport is to all intents and purposes a suburb of Portsmouth as it is linked by the Gosport Ferry which operates every 15 minutes. Gosport is a residential spot for those who work in Portsmouth but is also home to Royal Navy facilities including HMS Sultan.
Yields in this area, based on PO12 and PO13 postcodes, are a strong 4.9% - 5.4%.
Fareham
Population: 42,000
Average House Price: £300,000 - £330,000
Fareham is a separate town to the north-west of Portsmouth itself. Being on the mainland Fareham has excellent transport links, via the M27, and good train services not only to Portsmouth but to Southampton and elsewhere.
Although Fareham is a residential location for those who work in Portsmouth there are also a number of large employers in locations such as the Solent Business Park. This means Fareham has a buoyant jobs market which supports the Fareham property market. Companies located around Fareham include air traffic control service NATS Holdings, ONS, Eaton Aerospace, Cooper Vision, Meggitt Avionics and Schefenacker Vision Systems plus the Royal Navy’s HMS Collingwood.
Yields in this area, based on PO14 to PO17 postcodes, are 4% - 6.1%.