Insurance experts at Pikl have analysed the top locations in the UK with the most properties listed under £200k, helping potential buyers understand both the opportunity and the risks that come with these bargains. Cliff Ward, an insurance expert at Pikl, has delved into the locations and the potential risks behind them below:
Liverpool – 2,502 Properties Listed
Liverpool presents an exciting investment opportunity with over 2,500 affordable properties available. The city’s regeneration has driven strong economic activity and a booming tourism industry. However, investors should be aware of higher crime rates in certain areas, particularly in the city centre and Toxteth, as well as flood risks along the River Mersey. Areas with older properties may also have structural issues due to past industrial activity. With a significant proportion of listed buildings in the UK outside of London, the building construction type of any potential property may be an issue to look out for, as rebuilding these types of homes can be more expensive than homes made with standard building materials.
Birmingham – 1,663 Properties Listed
Birmingham’s property market remains strong, thanks to its expanding business district and transport projects like HS2. Affordable homes are plentiful, but some areas, particularly Aston and Handsworth, have higher burglary rates. The city’s clay-heavy soil may also pose a higher risk of subsidence heave or landslip in certain areas. You may want to factor this in as a potential concern when assessing a property.
Manchester – 1,619 Properties Listed
Manchester is a location with a thriving economy and high demand. Areas like Wythenshawe and Harpurhey offer affordable options, but some postcodes in South Manchester report higher burglary rates. Older properties may also have structural issues due to outdated foundations and lack of modern insulation.
Nottingham – 1,433 Properties Listed
With demand and low house prices, Nottingham is a popular choice. However, high crime rates and a history of mining may pose a risk for certain areas. Many properties sit on former mining land, which can lead to unexpected ground movement and property damage. Burglary rates and the risk of subsidence are issues to consider when buying a property here.
Leeds – 1,178 Properties Listed
Leeds may offer strong rental yields and is an overlooked area. While Beeston and Armley provide affordable options, flood risks and rental scams are concerns in some places. Potential buyers may want to consider avoiding areas that may have lower holiday let consumer confidence due to a higher instance of rental scams, or areas in close proximity to high flood risk areas.
Kingston-upon-Hull – 1,108 Properties Listed
Hull’s affordability and coastal location may make it attractive for holiday let investors, but flood risks remain an issue in some areas due to its coastal location. Rising sea levels and inadequate drainage infrastructure have contributed to frequent flooding incidents. Even if the property you are considering is not too close to the sea, some areas pose a higher surface flood risk than others. Factoring these issues in before purchasing can help you understand if the property you are buying will give you value for money. Additionally, older housing stock in Hull may require significant renovations to meet modern energy efficiency standards.
Sheffield – 990 Properties Listed
Sheffield’s affordable housing market may appeal to some investment buyers, but some older buildings in this location may have maintenance concerns. Many terraced houses in Sheffield have outdated wiring, plumbing, and insulation, leading to costly repairs over time. Investors may want to opt for structural insurance and property maintenance cover to mitigate long-term costs. Keeping on top of maintenance should be a priority, as any issues arising as the result of negligence are unlikely to be covered by an insurer.
Doncaster – 897 Properties Listed
Despite fluctuation in demand over parts of the year, Doncaster offers a mix of affordability and growth potential. However, certain areas experience higher crime rates, which can impact rental viability. Insurance premiums may take issues such as local crime rates and location to emergency services into account, so consider factoring these into any potential running costs when assessing the pros and cons of investing in a property here.
Stoke-on-Trent – 860 Properties Listed
With relatively low property prices and a growing economy, Stoke-on-Trent is gaining interest. That said, some properties are prone to subsidence due to former mining activity. The area’s industrial past has left some properties with contaminated land risks, which could lead to unexpected cleanup costs. Buyers should conduct thorough surveys before purchasing older properties to avoid hidden structural and environmental issues, as these could reveal hidden costs and insurability issues.
Sunderland – 821 Properties Listed
Sunderland’s affordability may be appealing for investors. However, coastal erosion and flood risks may affect certain areas. Additionally, Sunderland’s property market has seen fluctuations over time, so investors should be mindful of rental demand. Potential owners may want to consider protecting themselves against both environmental risks and issues that could affect the structural integrity of any property.
Key Takeaways for Buyers & Investors
While these locations offer affordability in overlooked locations, there are certain risk areas that potential investment property owners may want to conduct due diligence on before investing. Crime rates, flood risks, and structural integrity are potential factors that could impact long-term property value and its rental viability in the holiday lettings and private rental sectors.
Holiday let owners may want to consider tailored insurance to their chosen area. Investing in a budget-friendly property can be a great financial move, but understanding the risks is key to making it a profitable one.
