Should I invest in a buy-to-let in Leicester?

Leicester, the resting place of Richard III and home to the well-loved football team Leicester City F.C, is a place with ample opportunity when it comes to investing in buy-to-let property. Leicester is a vibrant city nestled in the heart of England and is known for its rich history, diverse culture, and dynamic economy. 

With a strong sense of community, innovative spirit, and strategic location, Leicester presents an appealing choice for you as a property investor looking into the buy-to-let market. Here, we explore why landlords should invest in a buy-to-let property in Leicester. 

Why invest in a buy-to-let in Leicester?

Leicester shines bright among many cities in the Midlands as an obvious choice for property investors, thanks to its rich assortment of terraced homes, chic city centre apartments, and charming semi-detached and detached houses. 

There’s truly a perfect match for every investor’s wishlist here. So, you will need to determine which type of property you wish to invest in first as you will be spoilt for choice! 

Increase in value

With an average property price hovering around £280,812 over the last year, according to Rightmove data, it sits comfortably below the UK’s average of £281,913. 

The city has witnessed a price jump of just over 6% in the last year alone, not to mention a whopping 93% increase over the last decade. So, it comes as no surprise that investing in a buy-to-let in Leicester will bring you great value in the future, too. 

Economy

The backbone of Leicester’s success lies in its vibrant local economy. This is a city on the move, with job creation, new business ventures, and skill development all on the rise. 

Not to mention, it’s experiencing one of the fastest population growth rates in the country, especially among the 25-34 age group, which spells good news for rental demand. 

With this in mind, if your target demographic ranges between those aged 25-34, you won’t need to worry about finding tenants to fill your buy-to-let property. 

Regeneration projects

Leicester is undergoing significant regeneration, breathing new life into its urban spaces and communities. Major projects such as the Leicester railway station and Pioneer Park project aim to revitalise residential, commercial, and public spaces, making the city even more attractive to residents and businesses alike. 

These developments are set to boost property values and rental demand in the surrounding areas. Let’s take a look at a few levelling-up projects currently taking place in Leicester that will significantly boost your property portfolio. 

• Revitalising St Margaret’s – a £15.2 million project to enhance the flow and feel around the junction of Vaughan Way, St Margaret’s Way, and Burleys Way.
• Leicester station gateway project – a £22 million scheme to remodel the station’s entrance, creating a more inviting gateway to the city.
• Pioneer Park – with a budget of over £19 million of funding (to add two more dock-style buildings and nine manufacturing spaces).
• Pilot House – with £8.6 million allocated-covering 75% of the total budget for the scheme, this development is set to become a nurturing ground for creative businesses. 

This investment is a clear signal of Leicester’s commitment to supporting and expanding its creative community, providing a space where ideas can flourish.

Education

Home to two prominent universities, the University of Leicester and De Montfort University, Leicester is a thriving educational hub. As you can imagine, this means that your student population in Leicester will be vast and if you want to dabble in the student tenant sphere, you will be more than able to do so. 

Transport and accessibility

Leicester’s strategic location in the Midlands, along with its excellent transport infrastructure, enhances its attractiveness to residents and investors. 

The city is strategically linked to major road networks, including the M1 motorway, and has efficient rail connections to London, Birmingham, and other major cities. 

So, if your target demographic is young professionals who need to commute to London for work you will find ample opportunity here. This connectivity supports a vibrant local economy and makes Leicester an accessible choice for commuters and professionals.

Property market overview

The Leicester property market can be characterised by its diversity and resilience. With a range of property types from historic Victorian terraces to modern apartments, the market caters to various preferences and budgets.

Despite national economic fluctuations, Leicester’s property market has shown steady growth, underpinned by the city’s economic development and population growth. There has never been a better time for landlords to invest in a buy-to-let in Leicester. 

Rental yield

Of course, rental yield is an important aspect to consider when looking into any property market and Leicester offers competitive rental yields compared to other UK cities, particularly in areas close to the universities and city centre. 

The combination of affordable property prices and strong rental demand contributes to attractive returns for investors. With certain areas of the city experiencing regeneration and improved amenities, there is potential for rental yields to increase even further.

The areas in Leicester with the best rental yields include: 

• LE1: with an average rental yield of 6.5%
• LE3: with an average rental yield of 5.2%
• LE2: with an average rental yield of 4.4%

The best areas to invest in buy-to-let in Leicester

When considering a buy-to-let investment in Leicester, several areas stand out for their potential:

• City Centre (LE1): The heart of Leicester, with easy access to shops, restaurants, and entertainment, appeals to young professionals and students. The ongoing regeneration efforts here are also set to enhance its appeal even further.
• Clarendon Park and Knighton (LE2): Popular with students and young professionals due to their proximity to the University of Leicester, these areas offer a vibrant community atmosphere and good rental demand.
• West End (LE3): Known for its diversity and character, the West End is becoming increasingly popular for its unique blend of residential and commercial offerings, appealing to a broad tenant base.

Leicester’s buy-to-let market offers a promising investment opportunity, with its blend of strong rental demand, ongoing regeneration, and strategic location to other bigger cities. By carefully selecting the right area and property type, you can capitalise on the city’s growth and potential for attractive returns on your property investments. 

For more information on the best buy-to-let insurance deals, make sure to get in touch with us here at CIA Landlords on 01788 818 670.