Is Wales Good To Invest in Property?

Thinking about property investment in the United Kingdom? With a 6.05% GDP growth and a 22.91% increase in house prices, property investment in the UK seems promising at the moment.

Several locations in the UK make the perfect place to invest in property, and Wales keeps coming up for its vast benefits; good rental income, protection against inflation, long-term security, and so much more.

Wales is a good place to invest in property. The price to rent ratio is irresistible, and if you are on a tight budget, investing in Wales won’t cost as much as other areas within the same region. Additionally, the region promises lower house prices for new buyers and lower living costs.

This article looks at why Wales is an excellent place to invest in property, what makes it great, and what you need to invest in property in the region.

Factors To Consider When Selecting a Place To Invest in Property

Before investing your hard-earned cash in the next place you hear about, you need to consider a few factors.

The population growth rate: people are the primary market for property investment, and a steady growth rate means that properties will rise in price in the near future. Recent statistics reveal that Wales had a 0.5% population growth in 2020. Besides, most businesses rely on people (consumers) for their survival, and having more people means having a broader market.
Location: The property’s location should be close to social amenities, including schools, hospitals, parks, etc. The region should also have favourable tax regulations that accommodate businesses and other commercial properties.
Security: People prefer living in crime-free areas. Although crime-free areas are difficult to come by, go for locations with a low crime rate.
Economic and employment opportunities: A prosperous economy means higher property prices and higher prices for food and other essentials. It also means more employment opportunities, higher incomes, attractive business opportunities, a higher level of security, and so much more. With the improved quality of life in a developed economy, you can be sure that the population will grow.

Carry out an investment analysis to predict the future of the region. Now that you know some of the factors that make a location desirable, let’s find out what makes Wales an excellent place to invest in property.

Why Is Wales a Good Place To Invest?

Wales is home to a little over 3.1 million people, making up 4.8% of the UK’s population. The country attracts many tourists because of its beautiful beaches, castles, stunning natural scenery, national parks – the list goes on.

Wales is a good place to invest, primarily because of the low property prices. The average property price is £215,000, which is much lower than the average cost (£268,349) of property in England.

On top of that, Wales is also an excellent place to start a business with steady positive economic growth. Although the country isn’t as wealthy as England and Scotland, it still has a bigger GDP than over 100 countries.

The Welsh economy greatly supports start-up businesses with both debt and equity funding. Increased growth of businesses has led to wealth creation and lower unemployment rates.

A few years back, Cardiff, Wales’s capital city, was ranked among the UK’s top five cities with high business growth. Additionally, employment rates in Wales have markedly increased compared to other places in the UK.

Wales is also known for its affordable lifestyle and less crowded environments. The country’s business innovation system highly supports students’ skills, retaining graduates in the area. All this is promising to both future economic and population growth.

Other Investment Concerns in Wales: Industries and Housing Prices

Wales has a diverse business sector comprising of industries such as:

Life Science
Tech
Manufacturing
Tourism
Food
Science

The country also has a strong collaboration between the academia and business sectors and fully embraces creativity and innovation, resulting in further diversification.

Welsh Industries

In case you didn’t know, the Welsh manufacturing sector, agriculture, energy, and tourism, among other sectors, make up the largest part of the economy. The manufacturing sector takes a large percentage of the employment force, followed by real estate and human health.

Wales’ diversified business sectors have led to an increase in the Welsh economy. Real estate takes only 11.2% of the industry sector, which shows a significant gap in the market. This proves yet again that there is no better time to invest in property in Wales than now.

Rising House Prices in Wales

Although Wales has remained one of the cheapest countries to live in the UK region, with a 15% lower cost of living and 30-35% lower property costs, it may not be in a few years.

House prices have been rising fast in Wales ever since the pre-pandemic period. A greater population already wants to move to less crowded areas in the suburbs. Wales house pricing has risen over time due to increased land transaction cost and the growing gap between supply and demand.

However, that’s not all. House prices are expected to soar even higher in the near future, making it a good opportunity to invest in property in Wales before prices increase. People are becoming aware of the country’s growing business ecosystem, and many people are now buying properties in Wales.

What Is the Best Place To Invest in Wales?

Although Wales is considered to be a good place to invest in property, some areas will do better than others. Finding out how different regions perform allows you to choose a location with higher property return profits.

South Wales is the best place to invest in property compared to North wales. First, South Wales is home to a much larger percentage of the population, meaning a bigger property market than North Wales. It’s also abundant in thriving cities, e.g., Cardiff, Swansea, and Newport.

It’s also home to a larger student population since most of the universities are in the South.

South Wales has easier access to London than North Wales. It also faces a higher demand for rental property, with higher average let yields compared to other towns in the Northern region.

There are also ongoing plans for the South Wales Metro and large UK regeneration plans to grow the country’s economy, which promises higher returns for investors in the long-run.

Last but not least, the percentage of buy to let property yields in South Wales cities range from 3.6% to over 5.5 %, depending on the area. North Wales yields fall between 3.8% to 4.9%. The best places to invest in South Wales with the highest yield returns include Rhondda Cynon Taff with 5.5% and Cardiff with 5.3%.

If you want to shift your attention to the Northern towns, you could go for a high-yield town such as Caernarfon (5.2%).

Final Thoughts

All things considered, Wales is a great place to invest in property. Attractive economic growth and vast opportunities for Welsh real estate ventures make it a suitable place to invest in. Besides, the strong links between higher education and industry have also led to the creation of many enterprises, attracting more investors.

Sources

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Alec Hanson

Co-owner of Just Do Property Ltd, Alec has over 10 years experience investing in rental properties.

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