Stoke-on-Trent Property Investment: Is It a Good Place to Invest?
Is Stoke on Trent a good place for property investment?
Stoke-on-Trent can be a good place to invest in property for investors prioritising rental yield and lower entry prices. The city offers affordable housing stock, consistent tenant demand, and multiple viable strategies ranging from single lets to HMOs. While capital growth is more selective and location-dependent, the numbers can work well when properties are bought correctly. This is why Stoke-on-Trent continues to attract both UK and overseas property investors.
We will summarise this into three different categories: Rental Yields, Capital Growth and Rental Strategies.
High Rental Yields in Stoke-on-Trent
Profiting from Affordable Housing and a Vigorous Rental Market.
What are the average rental yields in Stoke on Trent? There are a number of factors that contribute to the high rental yields in Stoke-on-Trent. The city’s affordable property prices. Stoke-on-Trent generally has a lower average house price compared to many other regions in the UK. Zoopla’s article published in September 2022 titled: ‘Revealed: the 10 highest-yielding areas in the UK’, shared that the average house price in Stoke-on-Trent is £160,000, which is significantly lower than the national average of £275,000. This means that the initial investment required to buy property is comparatively lower, making it an accessible market for a wide range of investors. So landlords can buy properties in Stoke-on-Trent for a fraction of the price they would pay in other parts of the country.
With regards to the rental yields. The City of Stoke on Trent average yield of 6.63% – that is without taking into account rental strategies such as HMO and Serviced Accommodation or HMO/student market.
This rental yield is significantly higher than the national average of 3.2%.
The city’s strong population growth with a population growth at a rate of around 1% per year, excellent transport links and the city constantly undergoing periods of regeneration, which is improving the local economy and making it a more attractive place to live.
Another factor that contributes to Stoke-on-Trent’s high rental yields is the city’s dynamic rental demand from various demographic points. The city is home to two Universities and has a robust student population.
Stoke-on-Trent is a major university city, with two universities – Keele University and North Staffordshire University – that together have over 30,000 students. This provides a steady stream of demand for rental properties from students.
In addition to students, Stoke-on-Trent also has a large population of young professionals who are looking to rent properties. The city is home to a number of large employers, including Siemens, NCH Healthcare, and Bet365. These employers provide good jobs and salaries, which helps to support the demand for rental properties in Stoke-on-Trent.
Zoopla’s recent article also notes that Stoke-on-Trent’s property market is expected to continue to grow in the coming years. This is due to a number of factors, including the city’s strong economic growth, its growing population, and its investment in infrastructure. As the property market continues to grow, rental yields in Stoke-on-Trent are likely to remain high.
Overall, Stoke-on-Trent is a good city for investors who are looking for high rental yields. The city has a strong rental demand, relatively low property prices, and a growing property market. These factors all contribute to Stoke-on-Trent’s high rental yields, which make it a good investment for buy-to-let landlords.
Capital Growth in Stoke-on-Trent
There are several factors as to why Stoke on Trent has had a huge economic growth in past decade. It is an up-and-coming City with Great Transport and Infrastructure. In this article we will focus on transport and rail networks. Stoke-on-Trent’s capital growth story is closely tied to long-term regeneration and transport-led infrastructure investment, which we break down in detail in our article on Stoke-on-Trent regeneration schemes
How will the government’s Network North project and Levelling Up Campaign project benefit Stoke on Trent? Firstly, lets overview it’s current scenario in the city. Stoke-on-Trent has seen considerable growth in urban regeneration, improving its overall appeal and potentially leading to property price growth over the medium to long term. This could mean that not only can investors achieve a good rental yield, but they may also benefit from capital growth on their investment. The city boasts strong transport links, including easy access to major motorways and a well-connected railway station with direct trains to London, Manchester, and Birmingham. This connectivity is attractive to tenants and could boost property values over time. Investors can expect to see a healthy return on their investment. This is due to its growing population and consequently an ongoing strong demand for rental properties as well as purchase and resell prices.
Secondly, the HS1 phase 1, underway, is already a significant infrastructure project in the UK, designed to improve connectivity between the North and South, by delivering faster, more efficient rail services. The goverment recently published Network North project as part of the Levelling Up Campaing.
The government is committed to executing the HS2 phase 1, and will also establish a railway link between London and the West Midlands. The route will feature stations at Old Oak Common and/or Euston and Birmingham Interchange and will extend to central Birmingham and Handsacre, close to Lichfield. At Handsacre, HS2 trains will merge with the West Coast Main Line, facilitating travel to Manchester, Liverpool, and Scotland.
Hint: Stoke-on-Trent, situated roughly halfway between Birmingham and Manchester, stands to benefit greatly from this project.
From an economic standpoint, the HS2 phase 1 will likely attract more businesses and industries to Stoke-on-Trent, as it naturally also improves connectivity to the south of the country. The increased connectivity will make it easier for people to commute to and from the city, potentially widening the pool of talent available for local businesses and drawing more customers to the area. This improved connectivity could also increase the city’s appeal to investors and developers, who might see opportunities for growth in Stoke-on-Trent’s property and business sectors. The prospect of more jobs and economic activity could, in turn, fuel demand in the local housing market, potentially leading to property price growth.
From a societal viewpoint, by reducing travel times to major cities such as London, residents will have greater access to opportunities and amenities outside their local area. It could also stimulate local tourism by making it easier for people from other parts of the country to visit Stoke-on-Trent’s attractions. This enhanced connectivity could, therefore, bring about a cultural exchange that benefits the city. The anticipation of these benefits could make Stoke-on-Trent a more attractive place to live, which would be positive for the local property market.
Growing Economy and Employment in Stoke-on-Trent
The city’s economy has been on an upward trajectory growing from strength to strength with significant investments in sectors like Information Technology, retail, and distribution. This add strength to the Property Investment Market. The local council has been encouraging business investments, creating more job opportunities, and thereby drawing more potential tenants.
Economic growth of Stoke on Trent has been going from strength to strength and consistent regeneration schemes.
Stoke-on-Trent is expected to see the sixth-fastest employment growth in the UK, according to a new report. The Powerhouse study in the UK, jointly published by the Centre for Economics and Business Research and legal firm Irwin Mitchell, conducted an analysis on the 50 most substantial local economies, assessing them based on employment rates and the increase in gross value added (GVA).
The study found that Stoke-on-Trent is predicted to see employment levels grow by 2.2% year-on-year, increasing to 130,500 by the end of 2022. This is higher than the national average of 1.9% and faster than major cities such as Manchester, London and Birmingham.
The study attributed Stoke-on-Trent’s strong growth to a number of factors, including the city’s growing population, its investment in infrastructure, and its strong manufacturing sector. The city is also home to a number of large employers, including Siemens, Bet365, and NCH Healthcare.
The study’s findings suggest that Stoke-on-Trent is a good city for businesses and investors. The city has a number of factors in its favour, including a growing population, a strong manufacturing sector, and a commitment to investment. As a result, Stoke-on-Trent is likely to see continued economic growth over the next few years. For the above reasons Stoke-on-Trent has also been tipped to have third highest jobs growth in 2023.
Stoke-on-Trent’s economic fundamentals extend beyond short-term regeneration headlines. The city benefits from a growing employment base across manufacturing, logistics, healthcare, and technology, alongside two expanding universities that continue to attract and retain students and skilled workers.
In parallel, the city has developed a growing startup and scale-up ecosystem, supported by national rankings for affordability and business formation, alongside targeted government-backed initiatives designed to attract new businesses and investment into the region.
Key Factors Supporting Stoke-on-Trent’s Investment Case
Some factors as explained above that contributed to Stoke-on-Trent’s ranking are the low cost of living, which can help startups to save money on rent, salaries, and other expenses. Another one is the strong talent pool: Stoke-on-Trent has a strong talent pool of skilled workers, many of whom are graduates from the city’s two universities. This can help startups to find the talent they need to grow their businesses. The Growing tech scene too. Stoke-on-Trent is home to a growing tech scene, with a number of startups and scaleups in the areas of cybersecurity, artificial intelligence, and fintech. This can provide startups with access to a supportive community and a pool of potential customers. Finally the Government support. Stoke-on-Trent is home to a number of government-backed initiatives that support startups, such as the Stoke-on-Trent and Staffordshire Growth Hub. These initiatives can provide startups with financial support, advice, and access to networks.
Rental and Property Investment Strategies in Stoke-on-Trent
Which rental strategies are available in Stoke on Trent? In essence, the city offers investment opportunities across all strategies, that is Buy to Let, Social Housing, Houe of Mutiple Occupation (HMOs), whithin the HMO market we find professionals and working people, student market, nurses, assylum seekers and serviced accomodation (short let strategies). These, plus a various types of building conversions. The final criteria as to why we like Stoke on Trent for property investment are the rental strategies; in essence, in the city of Stoke landlords can do most of rental strategies.
Is Stoke on Trent good for HMO? Stoke on Trent has two major universities: Keele Univeristy and North Staffordshire University. Both Unviersities are notable factors contributing to the city’s attractiveness as a location for Student Property Market. Both institutions are prominent higher education centres that draw a substantial student population to the city each year, creating a robust demand for student accommodation.
The University of Keele’s ten-year development plan, unveiled in the early 2020s, includes substantial investment in improving and expanding its campus facilities. Similarly, Staffordshire University has committed to a £40m Catalyst Building, aimed at bolstering its technology and innovation capabilities.
Furthermore, the city of Stoke-on-Trent is part of the government’s ‘levelling up’ initiative, which means further investment into education, including its universities. The local council recognises the role of education in city regeneration, translating into support for both universities. This means the student population, already numbering in the tens of thousands, is set to grow further, increasing demand for suitable housing.
The ongoing growth and regeneration of both universities will likely have a spill-over effect on the city’s economy and property market. Increased student numbers can stimulate local businesses and services, contributing to the city’s economic vibrancy. In turn, a thriving local economy can support property price growth over the medium to long term. As such, an investment in student rental property could offer both rental yield and capital growth potential.
Serviced Accommodation Investment Opportunities in Stoke-on-Trent
tStoke-on-Trent has been named as a surprise UK hotspot for Airbnb’s unique listings. In the past two years alone, nights booked at Airbnb’s unique properties in Stoke-on-Trent have increased by over 113%. This growth is being driven by a number of factors, including the city’s strong tourism industry, its growing population, and its investment in infrastructure.
As a result of this growth, Stoke-on-Trent is becoming an increasingly attractive investment opportunity for property investors looking for rental alternatives. The city has a relatively low cost of living, which means that investors can buy properties for a fraction of the price they would pay in other major UK cities. Additionally, the city’s strong rental demand and growing population are likely to support high rental yields for years to come.
Summary:
In conclusion, Stoke on Trent is a smart choice for a diversified portfolio. With its strategic location at the heart of the country, rental yields, growing economy, and affordable property prices, the city offers a range of investment opportunities that are worth considering. We’ve been highlighting these for years and in previous articles.
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