Is Hull City The Next Buy-To-Let Hotspot?
Updated: Jan 2, 2019
With Yorkshire becoming one of the most popular regions for buy-to-let investment in the UK, we take a look at the City of Hull, which has the potential of becoming the property hotspot of 2019.
In 2017, Hull saw its economy buoyed by its status as UK City of Culture. This helped to transform its visitor economy, stimulating business growth and delivering measurable
improvements to quality of life. In Hull, property owners are beginning to see the same positive effects that have been evident in previous cities of culture including Glasgow,
European City of Culture 1990, and Liverpool, European Capital of Culture 2008.
For a city of only 259,000 inhabitants, the economic impact of such a trend is difficult to overstate. It will inevitably boost average disposable incomes, it will draw new professional
workers to the area and it should therefore fuel growing demand for high quality rented accommodation. What's more, if Hull follows the same pattern as Glasgow and Liverpool into 2019 and beyond, then it should also see a marked and sustained rise in average property values.
Hull's status as the UK City of Culture during 2017 has seen mass regeneration, huge investment by the government and large corporate sponsors, and the creation of a thriving arts, dining and retail offering. Whilst this attracts tourists from across the UK and abroad, residents of Hull are enjoying a growing economy, population and a diversified employment market.
With a shortage of property to rent in Hull, there is an ever-growing demand from prospective tenants. Like we have seen in many of the Northern Powerhouse towns and cities, a growing number of young, city professionals are demanding high quality residential property with good transport links in and out of the city.
Hull City Council is certainly trying to close the demand and supply gap. Today the Hull City News reported that work has commenced on the cities "super estate" which will comprise of over 1,500 homes. This is linked to the £2.5 million regeneration zone that will consist of sustainable retail and commercial spaces, shops and restaurants.
Councillor John Black, portfolio holder for council infrastructure and responsible for housing at the council, said:
"With the start of construction we are seeing yet again how the council is spurring economic activity at a local level. "
Supported by Hull City Council, Associated British Ports (ABP) and the University of Hull, Green Port Hull seeks to establish the city "as a world class centre for renewable energy, creating wealth and employment for the region."
Based around a regenerated Alexandra Dock, it has at its heart a new manufacturing facility owned by Siemens, which is dedicated to the production, assembly and servicing of offshore wind turbine blades. Anchored by this major investment, the port is now expected to become a national centre for wind power and other sustainable energy technologies, such as biofuels, waste-to-energy, solar energy and tidal power generation.
In addition to manufacturing facilities, the development will feature storage facilities, offices
and car parking. There are also plans to construct a £600 million berth and a roll-on, roll-off ramp alongside the deepwater channel that will facilitate the transport of associated goods and materials.
University of Hull
No consideration of the local economy would be complete without reference to the University of Hull. One of the region's leading educational establishments, it is closely tied to some of the most important economic projects in the city. With a student roll of 16,000 and around 2,500 staff, it is also a major employer in its own right.
Founded in 1927, it has its main campus on Cottingham Road in one of Hull's northern suburbs, but it has a second campus in Scarborough. Its city campus is also home to the Hull York Medical School, a collaborative project with the University of York. Other notable faculties include the Hull University Business School, which teaches around 3,500 students from over a hundred countries, and the Postgraduate Medical Institute.
Besides producing thousands of graduates each year and spawning many successful start-up ventures, the University is an important driver of investment in the city. For example, its Brynmor Jones Library underwent a £27 million refurbishment between 2012 - 2014, and it
is now engaged in a £200 million improvement programme. It was also a principal partner of Hull's successful bid to become UK City of Culture for 2017.
Buying Property in Hull
For those looking to buy property in Hull, now is a great time to take full advantage of the relatively low prices, while the regeneration starts to take shape across the City.
For many years Hull has boasted a strong industrial and cultural heritage. Thanks to ongoing funding and development, it is fast becoming a focal point for the Northern Powerhouse, which makes it the perfect choice for property investors on any scale.
By national standards, property prices in Hull are exceptionally affordable. Indeed, in March 2018, Zoopla revealed Hull to be the most affordable destination for first time buyers across the whole of England and Wales.
In November 2018, Zoopla found that average house prices in Hull stood at £140,171, with flats selling for a little over £103,000. That compares against an average, for England, of £326,307 for houses and almost £313,000 for flats.
Figures published by the British Government in August 2018 show that average property prices in the East Riding of Yorkshire were £177,771, which is 2.5% up on the 2017 figure. This compares against an English average of £249,748.
Looking at Hull in particular, Rightmove notes that average prices stood at £120,879 over the 12 months to October 2018. This is substantially lower than the wider regional average. This is good news for investors looking to earn excellent yields, and when it comes to capital appreciation, the news is better still: according to forecasts by PwC, average prices in
Yorkshire are set to rise well ahead of the UK average. This would see local prices grow from £155,000 to £182,000 by 2022.
To find out more about what the City of Hull has to offer buy-to-let property investors in 2019, please call and speak to one of our industry experts.