Coventry – An Opportunity To Get Above Average Financial Returns
Finding a place with untapped potential for financial rewards might be a life-changing opportunity as UK property prices slowly rise each year. A well-known investment strategy used by many UK investors over the past century is buying real estate. However, this antiquated strategy depends on yearly inflation in the housing market, so this is a long-term benefit. In the past decade, the idea of flipping properties—buying, remodelling, and then selling—has gained popularity. Hamptons reports that 19,000 homes have been "flipped" since the covid pandemic started in March 2020. According to statistics from this survey, the average annual return for investors is £48,190, and almost 75% of real estate "flippers" sold their properties for more money than they paid for them. This is encouraging news for investors because this market has the potential to provide large returns. However, many towns and cities have the potential to generate significantly higher earnings as a result of the changes made there that have attracted tourists and encouraged people to make property purchases there. Coventry, which we shall now examine, is one of these cities with this potential.
Coventry, a city in the West Midlands, is classified as the 11th-largest city in the UK. While significant renovations to the city centre are now underway, investors have taken advantage of the economic impact to flip properties. Coventry is ranked as the third-best city in the UK in a research study conducted by Pink Storage, for those looking to swiftly renovate and flip a house. Within the entire region of Coventry, its CV6 postcode is the area that produces the quickest property sales, clocking in at 76 days sold after being listed. This is indicative of the rapid growth of Coventry as a place to reside, and the great investment opportunities with the potential of a quick and large profit. Properties in Coventry sold for an average of £228,909 over the previous year, according to Rightmove data. This represents a 12% increase over the peak price of 2019 of £204,607 and a 2% increase over the selling price in 2021, demonstrating the rapid rise in home values over the last three years. Coventry's affordable entry-level housing costs are currently rising as a result of the initiation of the development of the City Centre South project. Birmingham, one of the most well-liked multicultural areas in the UK, is only a 21-minute train ride away, making for an interesting commute and a reason to settle in Coventry!
As of March 2022, it is expected that the much-anticipated construction work on the City Centre South project will begin within the next twelve months. Construction of up to 1,300 houses, 150 hotel rooms, a movie theatre, restaurants, and commercial space was given the green light under the project's authorised consensus. The street level will have brand-new retail stores, community areas, and recreational areas. A new plaza will be constructed, which will be fronted by the city's well-known indoor market. This will catch any investor’s attention as the creation of high-end properties located in the heart of the city centre may drive up the price of surrounding properties. According to Chapman Taylor, this development should be completed by 2026. This forecast predicts that house prices in Coventry will start to rise dramatically, making now the ideal time to secure a property!
Friargate, a new business district, is also being developed, with the first building completed and the second under construction. Coventry is regarded as an established retail, cultural, and business hub. This new district aims to provide a first-rate working environment as well as an innovative public space to make the working day more enjoyable. The formation of modernised working districts will increase the demand for job opportunities in Coventry. As the population grows, so will the demand for housing, driving up the average house price.
Coventry is a popular place for students to live because it is home to the prestigious Coventry University and is located in the heart of the city. On the outskirts of Coventry is also where you'll find the University of Warwick. The University of Warwick was placed 10th overall among British universities in the official university rankings. This university's academic prowess will undoubtedly result in a strong demand for applicants in the near future. Many students at Coventry University commend the institution’s city for its superb nightlife. Around 30,000 students are thought to attend each of the universities. According to a formal announcement released by the university, the exact number of students at the University of Warwick for the academic year of 2021/22 was 29,534.
While the majority of first-year university students are required to reside in the university's official accommodation, during the second year, students are encouraged to rent their own houses to live in. A survey by National Student Accommodation (NSA) in 2020 found that 12% of students lived in private halls and that 44% of students lived in houses under a lease with a private landlord. Another sure-fire way to get substantial financial returns is to rent to students. With tens of thousands of new students looking to rent each year, property rental will be a lifeline for many years to come. This is bolstered by the fact that Coventry is home to two prestigious universities. Coventry offers numerous opportunities for investors to buy property and then rent it out to students. The flexibility of making both short-term and long-term profits from monthly rent until the contract with the residing students expires, and the potential sale of the property will generate a large financial return.
The buy-to-let market in Coventry is currently on the rise. Rent increases cause mortgage interest rates to fall, and demand for decent Coventry rental properties continues to rise. Due to the rising cost of residences, first-time buyers are being forced into the rental market. This has also resulted in a significant increase in average rent. According to Zoopla figures, the average rent in Coventry is currently £1,086 PCM. Additionally, other reports state that rental rates soared 7.2% on average in 2021, particularly in comparison to the year before. Long-term financial gains can be realised by investing in a growing buy-to-let market. Investors can earn up to a 5.9% rental yield in the CV6 region which makes the prospect of investing in the buy-to-let market enticing!
Coventry is one of the best-connected cities in the UK. It is an appealing location for businesses and commuters due to its proximity to the UK motorway network, as well as rail and air services. Coventry has a thriving digital economy and is home to over thirty digital businesses. Cloud computing and high-speed internet connections will encourage new businesses to start up and also provide efficient remote working capabilities for residents. This industry supports well-paying jobs and provides an incentive to live in Coventry. The overall growth of the economy in Coventry may result in a large number of people looking for work and a place to live. Property investment is ideal during this period of economic growth because job demand will increase property demand.
Novyy is a Community Investing Platform that enables individuals to invest in UK Buy-To-Let, Leading Real Estate Private Equity Funds, and Premium Homes across Europe with as little as £10,000. Novyy users enjoy seamless digital investing like never before, in opportunities that were earlier unavailable to most individuals. This piece should not be construed as tax advice. Please refer to your tax advisor before making any decisions on owning properties through Limited Companies.