Property Investment in Bristol
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In recent years, many property investors have turned their attention northwards. With London becoming increasingly expensive, and with a solid return on investment difficult to find, it’s no wonder why the northwest, with lower house prices and high yields, has become so popular.
Meanwhile, Bristol has been quietly simmering away in the background – perhaps overlooked due to its closer proximity to the capital. But whilst the average property price is higher than most cities in the north, there’s still an awful lot of upside potential for investors with the budget available.
First of all, it is, undoubtedly, a great place to live. It’s a talent hub for the southwest of the country, with over 465,000 residents, 46,000 businesses, two world-class universities, and a mantelpiece full of awards – winning best British city in which to live in 2014 and 2017.
But moreover, its economy is flying. Quite literally, too – the aerospace industry is a major player in the region, with the likes of Airbus, BAE, Rolls-Royce and GKN all based close by. Naturally, the port is a major source of trade and income with plenty of big-name manufacturing and engineering companies calling Bristol home. Plus, the city has one of the highest concentrations of tech and finance jobs outside of London.
Altogether, this paints the picture of a progressive city with a solid set of fundamentals to drive continuous improvement in the property market – both in terms of capital appreciation and rental prices.
Why is Bristol a good choice for property investors?
The average property price in Bristol is £356,165, at the time of writing (July 2022, Rightmove).
This puts the city well and above some of the more entry-level prices available in the north of the country – for example, Manchester’s average property price is £240,867. Nonetheless, it’s still half of London’s average price of £710,610.
And that means there’s still enough wiggle room to generate strong rental yields, which any buy-to-let investor should be prioritising. The average rental yield in Bristol is 5.1%.
The yields are driven by steadily increasing rental prices as a result of exceptional demand. The previously mentioned universities produce 10,000 new graduates into the city each year, and there’s a growing trend of people moving from London to Bristol. This means there are high numbers of young professionals, attracted by the city’s excellent engineering, finance and tech industries, to provide plenty of potential tenants.
In addition, the outlook for the city is positive. It was one of the first to formally recognise the climate crisis and this has focused all future development and regeneration efforts.
Over the coming years, the aim is to create a sustainable, community-focused city with a world-leading, circular economy. To do this, there are several projects planned or already in action:
- Temple Quarter – This area will be transformed into a mixed-use community with 10,000 new homes, 22,000 new jobs, and upgrades to the Temple Meads train station to expand rail capacity.
- Avonmouth Port – Expansions to the port intend to attract even more manufacturing and engineering companies, prioritising those with net-zero models.
- City Centre – The city centre is due an intensive overhaul, with a City Centre Development and Delivery Plan on the way that will provide the blueprint for the city centre’s transport, commercial, residential, leisure and hospitality infrastructure, in addition to detailing initiatives to meet environmental objectives such as becoming carbon neutral by 2030.
- The council’s partnership with Bristol Energy will invest over £1bn in smart, sustainable energy projects, which will have knock-on benefits for the community (e.g. jobs) and the city’s economic output.
- As these projects progress, and the city continues to evolve, it should have a positive impact on the local property market. Getting in now, although more expensive than other cities across the UK, could reap significant benefits for investors in the future.
If you’re interested in property investment in Bristol, get in touch with our team to discuss your options.
Types of Property Investment
With a huge number of young professionals either staying in Bristol after graduation or choosing to move to the city for work, there is huge rental demand.
So, purchasing residential buy-to-lets in Bristol is a fantastic option. We recommend centrally-located, high-spec apartment blocks. These properties appeal to tenants who want the city-centre lifestyle and have the income to afford solid rental prices - ensuring your property runs profitably.
Locations to consider include the city centre, Clifton, the inner city (e.g. St Paul’s, St Philip’s, St George, Netham, Easton), and the northern suburbs (e.g. Cotham, Horfield, Henleaze, Bishopston).
With over 64,000 students spread across the city’s two main universities (University of Bristol and the University of the West of England), there is a sizable opportunity for student property investment.
Student HMOs are popular near Gloucester Road, in areas like Bishopston, Horfield and St. Andrews. Moreover, PBSA projects are starting to pop up in the city centre to address a critical undersupply at the moment (just 13,000 units).
Savvy investors will know this shortage of units could boost rental premiums for the available units. And, given he student numbers in the city, it will take years for supply to catch up with demand.
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All information accurate as of July 2022.