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Bristol Property Market – Why you should invest in Bristol

by Dexter Bardua -

The Bristol property market is booming! There are a number of ways in which one can define success criteria when deciding which location to invest in and Bristol performs highly in all of them. Whether you are looking for the best capital appreciation, high rental yields, a strong rental market, or a mixture of factors, one could do no better than investing in property in Bristol.


A Bit about Bristol

 

To start with one should consider the particulars of the location. Bristol is well situated within the southwest, making it attractive to many different demographics. It’s one of the hottest areas of the UK with temperatures as high as 34 degrees. Bristol is also home to 13 beautiful beaches within an hour’s drive which makes it popular with visitors. In addition  to this Bristol has very strong rail and road connections putting it within easy reach of 30 million people. Londoners can travel to Bristol by rail via Temple Meads in around an hour and a half. The drive to London via the M4 is also very ‘doable’ taking around two and a half hours. The M5 also connects Bristol to the Midlands bringing many visitors from Birmingham annually as well as Manchester and Liverpool in the North-West.

An Overview of Bristol’s Rental Market

 

Bristol has a population of around 470,000 and has seen an increase of about 10% since 2010 and is forecast to increase to over half a million by 2030. There are close to 134,000 private renters in Bristol, meaning roughly 30% of Bristol’s population are in the rental market, this is a lot higher than the national average of 19%, meaning that the increase in population directly translates to more potential renters than other cities with similar population growth. In addition to this there was a shortfall of about 30,000 homes in Bristol as of May 2021. In general, an increase in population means a projected increase in demand for housing.

High Demand for Rental Property

 

This is important to investors as an increase in demand, as well as there being a shortfall in the supply of new homes, means both an increase in rental income and property prices, as well as increasing the likelihood of having tenants.

In the case of Bristol, the demand for housing has been further compounded by the mass exodus of people from London during the pandemic partly because of people’s work habits have changed, i.e., more people working from home and living arrangements based on this change. The demand for housing increased by 15% from 2020 to 2021 and shows no sign of slowing. Such data is a highly persuasive reason to invest in buy-to-let property in Bristol.

Rental Yields

 

This increased demand in housing leads nicely into the next reason to invest in property in Bristol, the increase in rental yields. The average rent in Bristol increased by 8% between 2020 and 2021, the highest of any UK city. Paired with the average rental yield of property in Bristol is 4.5% per annum (which is above the national average of 3.6%) there is a strong case to invest in property in Bristol. Many investors make their decision to invest based on yields as well as whether those yields are set to increase, again by this criterion Bristolian property is a great investment.

Bristol’s Economy

 

The Bristolian economy is also looking strong after the pandemic, the financial service company Raisin compiled a list of local economies that were in the best position to deal with the economic problems that came with the pandemic, this was based on the number of large businesses, business survival rate, birth and death rates and the average amount spent by the government per person.

Bristol was ranked third, it enjoyed an 8.3% increase in large businesses in the last five years, there being over 175 new large businesses starting and remaining successful. In addition to this 79.9% of Bristol’s population are employed and only 6% on government welfare.

Increase In Bristol House Prices

 

The state of the local economy is a strong indicator of the way in which property prices are going to change, the better the economy, with high employment etc, the more people can afford property, whether it be through borrowing or having the cash already. The fact that Bristol performs well in these areas further supports the notion that there will be continued capital appreciation on an investment into property in Bristol.

Another reason to invest in property in Bristol is the already present trend of property prices increasing. Property prices rose by 68% between 2011 and 2021. This trend is set to continue with property prices increasing by 2.1% in January this year alone and 8.1% up from the same time in the previous year. This continued upwards trajectory means that it is a fair assumption that investing in property in Bristol will mean continued capital growth which is another criterion by which investors assess the viability of an investment.

Bristol Property Regeneration

Short-Term Lets (Air BnB)

 

There is a huge market for short-term lettings with there being nearly 5 million overnight bookings in Bristol a year. This is, in part, due to Bristol being a major city with plenty of tourist attractions. There is also the wider area to consider which also has many amenities making Bristol an ideal holiday/mini-break destination. In addition to this is the international element of the short-let market with there being over 600,000 international visitors to Bristol every year, with the majority of them serviced by Bristol Airport.

Short-term lets generally give far greater yields than longer-term lets as

 they are let at a price per night, or a shorter period. It is true that it takes more organisation and management to maintain a high occupancy, an investor can choose to do this extra work themselves, but it is more common to hire a management company. Evan with these extra costs the profit margins of short-term lets are much more attractive. Moreover, given the strong short-term rental market that Bristol has it is hard to ignore this as an option.

Bristol beach

Student Rental Market

 

There is also the student property market to consider as Bristol is a city with 50,000 students in the city. Many of these students choose to stay in the area after graduation. This means that there is also investment in student accommodation to take into account.

 

 

Regeneration

 

The level of regeneration that is occurring and is planned should also be mentioned. Investment in Bristol’s regeneration includes:

  • £450 million housing scheme around the Western Harbour
  • Temple Quarter – the first phase of a 25 year, multi-billion-pound project including a £300 million campus for Bristol University. This has already created £1000 jobs in the construction industry and hopes to create 17,0000 jobs over the 25-year period
  • With the second phase focusing on the area of St Philips Marsh
  • There are plans for Temple Mead Station will receive a share of the £5 billion scheme to improve Bristol Railways. This will cut the current journey time to London by roughly a half.

According to a study conducted in 2019 by CBRE, which looked at the difference in property price growth between properties close to sites of regeneration in London and those in the wider area, found that properties close to areas of regeneration increased in value by 3.6% more than their counterparts in the wider area. This ‘regeneration effect’ bodes well for the increase of property prices in the areas of Bristol that are undergoing regeneration. This has a major effect on the local economy. The government’s 24 enterprise zones have created over 12,500 jobs and 434 new businesses, generating £2 billion in private investment.

Prime Bristol waterfront property

Bristol Ranked Highest in buy-to-let city tracker

 

Bristol topped Aldermore Bank’s buy-to-let city tracker it is a list which considers the following factors:

  • the average total rent
  • the best short-term returns through yield
  • long term returns by property price increase
  • growth over the last decade
  • the lowest number of vacancies as a proportion of the total housing stock
  • the percentage of the population which is in the rental market

Bristol’s ranking within the list confirms the strength of the Bristol property market and its status as a great place to invest.

In Summary

 

Bristol scores highly in all the factors that matter investors. Property prices are on the rise as are rental rates and the number of potential renters is also increasing. All this means that the Bristol property market is idea for investment.

See our Latest Development in Bristol

 

Click the image below to see details of completed and tenanted apartments in Bristol from £180,000

 

Link to Bristol Property Investment Opportunity

More Places to Learn about Bristol and it’s Property Market

 

 

https://www.bristolpost.co.uk/news/bristol-news/bristol-house-prices-rise-over-5945336

https://www.bbc.co.uk/news/uk-england-39320118

https://worldpopulationreview.com/world-cities/bristol-population

https://www.macrotrends.net/cities/22840/bristol/population#:~:text=The%20metro%20area%20population%20of,a%201.19%25%20increase%20from%202018.

https://www.bristol.gov.uk/documents/20182/33904/Population+of+Bristol+September+2021.pdf/e6cb7ac8-278c-c351-9dcc-07a83fb4fe23?t=1632843439676#:~:text=4.2%20In%20the%2010%20years,7.2%25%20over%20the%20same%20decade.

https://thebristolcable.org/2021/11/bristol-housing-renting-crisis-young-renters-on-crazy-demand/#:~:text=London%20saw%20a%205%25%20increase,agent%20Barrows%20and%20Forrester%20shows.

https://www.bristolworld.com/news/why-house-prices-in-bristol-are-still-rising-and-which-properties-and-areas-leading-the-growth-3630977

https://www.bristolpost.co.uk/news/bristol-news/bristol-rent-cap-how-much-6659711

https://www.bbc.co.uk/news/uk-england-bristol-56803719

https://www.raisin.co.uk/newsroom/raisin-research/uk-strongest-local-economy/

https://www.bristol247.com/news-and-features/news/high-hopes-for-95m-investment-in-temple-quarter-regeneration/

https://www.cbreresidential.com/uk/en-GB/news/news-regeneration-results-36-annual-uplift-house-price-growth

https://www.businessleader.co.uk/bristol-and-south-gloucestershire-tourism-economy-worth-1-4bn/#:~:text=Day%20visitors%20to%20the%20region,598%2C000%20taking%20place%20in%202018

 


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