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5 reasons to invest in property in Hull

By Surrenden Invest | March 4, 2022
Pinpointing where to buy is one of the most important decisions property investors must make, factoring current market conditions and future growth into the equation. Despite its strong market fundamentals, Hull has flown under the radar as a hotspot for property investment until now. In this feature, the experts at Surrenden Invest outline the top 5 reasons to invest in property in Hull and why this underrated Northern Powerhouse city has plenty to offer investors.

Unrivalled growth potential

Hull remains one of the most affordable buy-to-let locations in the UK. With average prices 20% lower than the likes of Manchester and 65% below the UK average, the city has started to attract an increasing number of buy-to-let investors looking for greater capital growth, yields and living conditions than the “go-to” regional cities for investment can now offer.
With the price average property in Hull currently standing at £157,576, significantly lower than the UK average of £270,708, the market has plenty of room for future growth. Even with the most conservative outlook, with property values rising in line with the UK average, investors stand to secure increasing equity within their assets over the coming years.
Looking to the future, property values in Hull are on course to see further growth, with the latest five-year forecast from Savills predicting an 18.8% rise by 2026. Compared to the UK’s average expected gains of 13.1% over the same period, Hull is on track to reward property investors with more robust house price growth.
Early investors entering this emerging property market will be rewarded with the most substantial long-term growth potential.

£157,576

Average property price in Hull currently stands at £157,576.

18.8%

Latest five-year forecast from Savills predicting an 18.8% rise by 2026.

13.1%

UK’s average expected gains of 13.1% over the same period.

£1.5bn

£1.5 billion worth of investment over the last eight years.

£1.5 billion worth of investment

With £1.5 billion worth of investment over the last eight years, Hull is rapidly transforming from an industrial port city into an area undergoing a cultural and economic renaissance.
For buy-to-let investors, the timing of Hull’s rise to prominence is arguably one of its strongest appeals, with several city centre and waterside regeneration schemes coming to fruition in relatively short succession.
Following an £11m government-funded redevelopment in light of its 2017 UK Capital of Culture status, Hull’s City Plan is set to build on its success with a £27 million transformation of its historic fishing ports into a world-class waterfront destination for tourists and businesses.
The £83.6 million regeneration of the Fruit Market is at the forefront of the waterfront revitalisation, which is now a hotbed for independent restaurants, shops, galleries, and businesses, and the home of Arco’s £16 million headquarters that will provide 200 new jobs to the area.
Moving towards the city’s centre, a wave of investment has injected life into the streets of Hull, with the £96 million Albion Square development leading the way for new commercial, residential, and green spaces.
However, the city centre transformation doesn’t end there. The careful restoration of existing city centre buildings into innovative living spaces like the recently completed £22 million Glass House building and the iconic BBC Building, which sit by Hull’s Queens Gardens and just moments from The Bank, is a representation of the quality of housing that is required on the local property market.

UK Capital of Culture status

Securing UK City of Culture status is an accomplishment hard to come by, and during its four-year reign, Hull showcased the best it has to offer.
Its UK City of Culture status gave the city’s most impressive landmarks and colourful history a new lease of life, welcoming a new wave of tourists to the city. In addition, a wave of investments revamped the city’s most attractive features, including the Queens Victoria Square, the Hull New Theatre, and the redevelopment of central spaces to deliver galleries, entertainment venues and bars.
From stylish drinking and dining venues to the Trinity Open Market in Hull’s Old Town, from the new Fruit Market to the wider transformation of the waterfront into a world-class location for tourists, there are many things to do in and around Hull.

Regional employment hub

Launched in 2013, Hull’s 10-year City Plan has seen the city undergo a rapid transformation. Initially set to create 7,000 new jobs, the plan exceeded expectations, delivering 20,000 additional jobs and adding £3.5 billion worth of investment.
Encouragingly for property investors, Hull’s Economic Strategy 2021-2026 is set to build on its success and economic growth, propelling the city into a new era of expansion.
Despite the pandemic, Hull’s employment rates were at their highest, with local wages rising faster than the national average and investment levels in the city reaching an all-time high. In fact, the 2020 Demos-PwC Index showed that Hull was amongst the then least affected cities economically by the pandemic.
In recent months, Hull has been leading the rebound of Britain’s jobs market, ranking fourth in terms of its rate of recovery. With the number of jobs in Yorkshire and the Humber expected to grow by 45,000 by 2030, the demand for high-quality rental accommodation, particularly in desirable locations like Hull’s city centre, will rise.
The introduction of the newly completed £7 million K2 office building and the regeneration of the 60,000 sq ft of space at Hammonds of Hull into an impressive food hall and retail centre will improve employment prospects and the overall desirability of the city centre.
Ranked within the top ten most improved UK cities as a place to live and work, Hull has also become an increasingly attractive option for tenants and investors alike. With the city and its economy expected to expand over the coming years, investors searching for long-term returns are in the perfect position to capitalise on opportunities in Hull’s private rented sector.

Is it time for landlords to increase rents?

As demand for rental property continues to outstrip the number of available options on the market, rents are likely to remain buoyant due to competition from private tenants. For landlords with tenants already in place, Zoopla has advised that despite the New Year bounce-back from renters, the demand peak has begun to ease in February, indicating that less competition will reduce the scale of rental growth across the next 12 months.
Affordability levels also remain a concern for renters so, if you’re considering increasing the monthly price of your rental property, it is worth researching the local market before re-listing. Instead, savvy landlords may wish to renegotiate longer tenancies with existing tenants in a bid to secure higher occupancy levels.

Excellent transport links

For future growth, areas like Hull, which benefit from excellent transport links, open up opportunities for businesses, residents, and investors. With impressive road, rail, air and port connections across the UK and international destinations, Hull is one of the best-connected cities in the North of England.
To support the city’s future growth, a £355 million investment to improve Castle Street – one of the busiest roads in Hull – will help ease travel on the A63, improving access to and from the city’s most significant regeneration projects.
For international travel, Hull is served by Robin Hood and Humberside airports, both within an hour’s drive, and regular ferry routes operate from the port to Holland and Belgium.
Direct rail services to London links Hull to the capital in around two hours and 40 minutes, whilst the M62 motorway connects Hull with its Northern Powerhouse neighbours Manchester, Liverpool and Leeds.
For investors, locations like Hull, which boast an established transport network, highlights the ongoing appeal of the area for businesses and, within a rising number of companies operating from the city, the demand for property is likely to rise.

Outlook for the year ahead

Good news for buy-to-let investors, Zoopla forecasts rents to continue to climb throughout 2022 – albeit at a slower pace than in the last 12 months. Although seasonal trends and affordability constraints are likely to see tenants stay put in their current housing, the record level of demand for rental property will ease in 2022.
The rate of rental growth is set to reach 4.5% across the UK, excluding London, and 3.5% in London. For those investing in buy-to-let property, stable and rising rents remain one of the most attractive reasons to enter the UK’s real estate market, providing steady yields year after year.
Investors looking at the broader property market will also be interested in rising property values across the UK, with the house prices in January 20229.7% higher when compared to the previous year, according to the Halifax House Price Index.
With rising rental values and the ability for property owners to secure increasing levels of equity, the outlook for property investors remains strong.

Invest in property in Hull

Despite its strong market fundamentals, Hull has flown under the radar of investors as a hotspot for property investment. Few regional locations compete when it comes to lower entry-level properties with excellent capital growth potential.

If you wish to invest in property in Hull, follow this link to find out about our city centre apartments for sale or contact Surrenden Invest.

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