In recent years, the UK’s biggest cities – London, Manchester, Birmingham and Liverpool – have attracted the bulk of interest from property investors at home and abroad. With huge rental markets and exceptional returns, it’s no wonder why.
However, there is a growing trend of looking further afield as these traditional big-hitters become increasingly saturated. Savvy investors are now seeking opportunities in smaller cities that haven’t garnered as much attention. One of the most promising locations, leading this new wave of investment interest, is the historic Lancashire city of Preston.
Over the last few years, we’ve worked on several buy-to-let projects in Preston, helping investors identify and purchase properties in the city.
In this guide, we’ll lean on our experiences and available data to explain everything you need to know about property in Preston, including the five best areas to purchase a buy-to-let.
Overview: A city of changing fortunes
Preston was at the centre of Britain’s cotton production in the Industrial Revolution, with more than 40 mills dominating its skyline by 1835. Preston was also home to a dockyard that flourished from 1800 onwards. Workers unloaded grain from ships and transported it to other urban centres in the north, such as Manchester, by rail and canal.
Unfortunately, Preston’s golden age didn’t last long. After 1950, the cotton industry went into terminal decline, rendering thousands of people unemployed.
In the early 21st century, though, Preston is showing signs of sustained recovery, something that should attract the attention of property investors. In fact, the city has been discussed as one of the most promising buy-to-let locations in the country, thanks to several development and regeneration projects, the presence of successful universities, and new big businesses.
Here are four of the most exciting developing projects in Preston:
- City Living Strategy, a vision to transform Preston’s city centre into a thriving hub and example of modern living
- Harris Quarter Regeneration, a regeneration project that is already underway, designed to increase footfall and spending in the city centre
- Preston Station Quarter Project, a new project involving the construction of high-grade offices and commercial space close to the railway station
- University of Central Lancashire Masterplan, a project to further develop one of the UK’s most famous universities and create truly world-class teaching, research and leisure facilities
For those considering property investment in Preston, this is exciting news: the city is serious about capitalising on recent success and maximising on its potential.
Preston is also becoming a more vibrant commercial hub, with the local economy named the fourth fastest-growing in the UK. In addition to healthcare and local government, large employers now include:
- The region’s four universities (Lancaster University, University of Central Lancashire, Edgehill University, and University of Cumbria)
- Booths
- James Hall & Co.
- BAE Military Air Solutions
- Leyland Trucks
- Rolls Royce
- Silentnight
- EDF Energy
- Fox Biscuits
Given the diversity of Preston’s economy and some of the high-tech enterprises in the region, wages are likely to rise in the future. This should have a knock-on effect on the property market, so investors who enter the market today could benefit from substantial capital appreciation and rising rents in the future.
Why is Preston a good choice for property investors?
The main benefit of Preston for a property investor, compared to the UK as a whole, is that the market is much more affordable.
Average house prices are £168,000 (as of November 2023), significantly lower than the national average of £291,000. This is perfect for entry-level investors or those looking for a low-cost addition to their portfolio.
Furthermore, the city is a particularly great choice for buy-to-let investors because:
- It is at the heart of nearly a dozen regeneration projects, which are boosting the city’s economic progress and making it a more desirable place to live.
- Lower property prices mean achieving a good rental yield is more likely. In fact, Preston scored extremely well in our research into the UK’s best locations for rental yield, with the city coming 4th on our list.
- It’s the third-largest city in a high-performing region, with property prices in the North West forecast to grow faster than anywhere else in the country over the next few years
- It is developing a fantastic reputation, with plenty of awards and recognition (it was named the most improved city in the UK in 2018, and in 2022 it topped the bill as the best place to live and work in the North West)
- It has a young, talented population with a steady supply of graduates from UCLan and other universities – who are sticking around and working in skilled employment
- If Preston can follow through on its plans over the next 15 years, the city is positioned to become one of the most desirable places to live in the UK, never mind just the North West.
- Its development so far and potential for further growth should generate exceptional returns for investors, as happened in other small cities in the 2000s, like Cambridge and Oxford.
If you’re interested in learning more about buy-to-let and other property investments in Preston, please get in touch with our team.
Types of property investment in Preston
To suit different investor profiles and objectives, there are multiple types of property available in Preston. The two biggest opportunities are buy-to-let apartments and houses, and student accommodation.
Buy to let in Preston
Buy-to-let investments in Preston tap into the city’s growing rental demand from families and young professionals – all of whom are attracted to the city by a host of local amenities, transport links (the M6 motorway runs through the city), and employment opportunities.
Investors can choose from a variety of properties, including modern apartments, traditional terraced houses, and larger family homes.
The appeal lies in the potential for long-term capital growth and stable rental yields, as evidenced by the rising property values and sustained rental demand.
Student property in Preston
With the University of Central Lancashire (UCLan) at its core, Preston is a vibrant student city. Investing in student accommodation offers a different value proposition, with higher potential rental yields due to the ability to rent out individual rooms.
Properties in close proximity to the university campus, or those offering easy access to academic buildings and city life, are particularly in demand. Plus, the consistent influx of students each academic year means it’s highly unlikely a student landlord will suffer void periods.
Top 5 Buy-To-Let Areas In Preston
So, which are the best areas to consider when looking for a buy-to-let in Preston?
By using industry data, we’ve drawn up a shortlist of the five postcodes generating the strongest rental yields.
| Postcode | Avg asking price | 5yr price change | Avg asking rent (pm) | Avg yield |
| PR1 | £166,232.00 | 7% | £840.00 | 6.10% |
| PR25 | £214,241.00 | 17% | £931.00 | 5.20% |
| PR2 | £202,686.00 | 12% | £849.00 | 5.00% |
| PR5 | £210,842.00 | 15% | £817.00 | 4.60% |
| PR8 | £256,520.00 | 20% | £926.00 | 4.30% |
PR1
In the heart of Preston, PR1 emerges as an attractive hub for buy-to-let investors, boasting an average asking price of £166,232. This area has seen a respectable 7% price surge over five years. Rental demand remains robust, with properties fetching an average of £840 per month, translating to a solid yield of 6.10%. Its proximity to the city centre and key amenities make PR1 a promising choice for a diverse tenant base.
PR25
PR25, encompassing the Leyland area, is noted for its family-friendly feel. With an average property price of £214,241 and a significant 17% price appreciation over the last five years, it represents a steady market. The monthly rent averages at £931, contributing to a yield of 5.20%. Its schools and parks are a draw for long-term tenants, underpinning the area’s investment potential.
PR2
PR2 offers a blend of residential comfort and accessibility, with an average asking price of £202,686 and a 12% increase in property values over the past five years. Rental figures stand at an average of £849 per month, offering investors a yield of 5.00%. Its appeal is enhanced by good schools, shopping facilities, and transport links, making it a consistently popular choice for families and professionals alike.
PR5
South of the city centre, PR5 presents a more laid-back atmosphere, reflected in an average asking price of £210,842 and a 15% growth in property value over five years. The area commands an average rent of £817 per month, leading to a yield of 4.60%. With its access to the countryside and good commuter routes, PR5 is poised as an attractive prospect for those looking for a balance between urban and rural living.
PR8
PR8 stands out with the highest average asking price of £256,520, aligned with a robust 20% property price increase in half a decade. The average rent here is £926 per month, yielding 4.30%. This area is characterised by its affluent neighbourhoods, scenic parks, and quality local amenities, making it a premium locale for discerning tenants and investors seeking long-term value growth.
Considering buy-to-let investment properties in Preston?
We’re here to help you source and purchase exceptional buy-to-let properties in an ethical manner, at no extra cost. We draw on years of experience supporting investors across Preston, the North West of England and beyond, to find the perfect property for your goals and budget.
All information is accurate as of November 2023.
