Where to Invest in a Buy-to-Let in Cardiff04-01-2024 | Wales
If you’re thinking of investing in the capital of Wales, you will not be disappointed. With many new regeneration projects and development initiatives, Cardiff is becoming an increasingly popular area to invest in. Known to be one of the fastest-growing cities in the UK, the demand for both landlords and tenants is inevitably increasing. But, you may not know where to invest in a buy-to-let in Cardiff yet.
In this comprehensive guide, we will give you the low-down on why it is a wise idea to invest in property as a landlord and to expand your property portfolio. If, however, you are new to the property market, you will become familiar with all of the reasons why beginning your property investment journey in Cardiff is a profitable one.
If you also need to figure out which type of landlord insurance is suitable for your property portfolio, then CIA Landlords is the place for you. Our brilliant team has all the knowledge and expertise you need to make informed decisions.
Why investing in Cardiff is a good idea
Made up of many independent businesses, and various cultural activities, and with rural areas situated nearby, Cardiff is a capital city like no other. Walking down the streets of the capital city will leave you with a friendly aura given the size of the capital, too.
There is a growing student and young professionals population which also adds to the attractiveness of the city. If you were wondering if this city is one worth investing in, then these reasons alone should answer the question for you. However, let’s take a look at a few other reasons why investing in Cardiff is a profitable choice.
History of Cardiff
Starting as a small market town and then transforming into a large and varied city with a port, Cardiff has a rich history and a lot to offer its residents in modern times still.
With evidence of Roman construction, to standing tall even through the terrors of WW2,
Cardiff Castle has seen it all and is one of Wales’ leading heritage sites. Known as the heart of the city, Cardiff City Hall is also a beautiful attraction for tourists and residents alike; it is arguably one of the world’s most beautiful civic centres.
When it comes to independent businesses, the Victorian arcades of the Castle Quarter are still home to traditional independent businesses. Although not all visible today, during Cardiff’s industrial prime, canals were running across most of the city. Most of these are still visible, with some underground.
This beautiful and vibrant city was granted city status on 28 October 1905, and since then, has grown from strength to strength.
As you may expect with any capital city, Cardiff has a rich cultural scene with a dynamic art scene and houses many different unique art spaces, with street art being a popular genre, too. The Empty Walls festival in 2014 has brought over 20 new street artists to Cardiff to create a quirky outdoor gallery.
Additionally, Chapter, a state-of-the-art venue with over 80,000 visitors annually, is a multi-artform cultural space, offering a community feel with food and drinks available too. Chapter offers 30 studio spaces where artists can express their art, including a cinema and gallery.
In 1987, the Cardiff Bay Development Corporation was set up by the UK’s government to regenerate 2.7k acres of dockland between Cardiff and Penarth and was a part of the Government’s Urban Development Programme. The aim of this project was to redevelop deprived areas in the city and to put Cardiff on the international map! A few other key objectives were to
- create a developed area where people want to contribute to the community and are proud to live
- enable the city centre to be reunited with its waterfront
- create more job opportunities by building a mixed development
- be able to achieve the highest standard of quality and design as a result of the development and investment made
- ensure that the area is recognised as a centre of excellence regarding urban regeneration
This was one of the biggest regeneration schemes seen in both Wales and the UK, resulting in becoming one of Europe’s largest waterfront developments and has created job opportunities for many due to the many bars and restaurants situated along it.
There has also been a lot of investment put into the regeneration of transportation in Cardiff. Recently, £1 billion has been invested into the South Wales metro, resulting in it being easier to commute around the city and country. This is a great perk for landlords looking to invest in buy-to-lets in Cardiff and makes living here a positive for potential tenants.
Due to the regeneration projects in Cardiff, the pricing of housing had grown by 41.2% over the previous decade in January 2020, and as of March 2023, Cardiff housing prices average at £256,993. This is 6% higher than in 2022.
Cardiff is home to three universities, making the student population rife in this city and creating many opportunities for landlords in the student housing market; Cardiff holds 80,000 students in total.
The prestigious Russell Group’s Cardiff University is the only red-brick university in Wales and is ranked 154th in the world. Cardiff Metropolitan University is the second university that can be found in the city and hosts over 12,000 students. The third university in Cardiff is the University of South Wales which was founded in 2013 after the merger of the University of Wales, Newport and the University of Glamorgan.
Thriving rental market
The demand for rental properties in Cardiff is consistent and strong and there are various types of properties that landlords can invest in, such as modern apartments, student accommodation, suburban terraces, and semi-detached and detached houses.
The rental income yields in Cardiff are also extremely competitive and there is a potential for capital growth, making Cardfiff an attractive prospect for landlords. Additionally, the demand for housing in Cardiff is also high largely due to a growing population and the stability in the economic market.
The rental yields in Cardiff are profitable which is why many landlords choose to purchase buy-to-let properties here. The UK’s average rental yield is 3.63%, making Cardiff’s rental yield higher, averaging at 5.8% for a property price of £314,643.
The best places in Cardiff to invest in a buy-to-let
After considering the information provided above, we can now take a look at the top 5 buy-to-let areas in Cardiff.
1) CF37 – Pontypridd
With a modest average home price of £158,656 and a yearly rental yield of 8.6%, Pontypridd, positioned a mere 12 miles north of Cardiff, is capturing the attention of numerous investors – and for obvious reasons.
Its accessibility to the Welsh capital through the A470 road, linking to Cardiff and the M4 motorway, adds to its appeal. The town hosts the University of South Wales, drawing in a substantial student community annually. Consequently, there’s a continual need for student housing in the CF37 area, rendering it an enticing choice for investors eyeing the student rental market.
2) CF10 – Cardiff City Centre, Cardiff Docks, Cardiff Bay
The CF10 postcode area is a hotspot for individuals seeking a vibrant lifestyle within Cardiff’s city hub. It’s particularly favoured by Cardiff University students and young professionals aiming for a convenient commute, whether within the city or via Cardiff Central Station. Notably, residents relish their proximity to attractions like Bute Park, Cardiff Castle, and the Principality ‘Millennium’ Stadium, frequently hosting major sporting and musical events.
Housing options in this area encompass an array of properties, ranging from contemporary apartments to historic townhouses and upscale developments. Investors typically find appealing rental yields at 7.4% annually, coupled with accessible housing prices averaging £187,691.
3) CF3 – St. Mellons, Rumney, Pentwyn
Another buy-to-let investment hub, CF3 encompasses the districts of St. Mellons and Rumney situated east of the city centre, sought after by professionals and families desiring a more serene lifestyle.
Offering an assortment of residences including houses, townhouses, and apartments, CF3 caters to diverse tenant demographics. Property prices here are approximately 10-15% lower than those in central Cardiff, making it an attractive option for budget-conscious property investors, especially considering the average monthly rent of £1,257.
4) CF39 – Porth
Nestled in the heart of the Rhondda Valley, Porth presents itself as a picturesque haven for commuters seeking solace from urban commotion.
Boasting excellent road connections, particularly via the A4058, Porth provides access to key routes in the South Wales Valleys. Commuters benefit from accessible public transportation, encompassing buses and trains connecting to the city centre. Additionally, these transport links facilitate easy exploration of the heads of the valleys and the breathtaking Brecon region.
While property prices in Porth are notably lower than those in the city, landlords can anticipate a respectable annual rental yield of 5.5%.
5) CF63 – Barry
Embraced by professionals, families, and business travellers seeking a seaside lifestyle without sacrificing access to urban amenities, Barry enjoys widespread popularity. Recent years have witnessed several revitalisation endeavours aimed at enhancing the town’s infrastructure, public areas, and cultural offerings.
Notably, Barry Island has undergone substantial redevelopment, transforming into a sought-after tourist spot. This transformation has acted as a catalyst for surging property values and heightened rental demand in the area.
Now that you have all of the information needed to make an informed decision about where to invest in a buy-to-let in Cardiff, you may need some support in understanding why buy-to-let insurance is the best option for you.
Call our dedicated team at CIA Landlords at 01788 818 670 for more information!
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