Buy-to-Let Exeter
Understanding Property Prices and Expected Growth
Welcome to Exeter, a vibrant and bustling city located in the south-west of England. With a rich history dating back to Roman times, Exeter has become a popular place to live, work, and visit. For those interested in the buy-to-let market, Exeter offers an attractive investment opportunity. In this guide, we will delve into the reasons why Exeter is a sought-after location for buy-to-let properties. From its thriving economy and ongoing regeneration plans to its growing student population and popularity among tourists, many factors make Exeter a promising city for buy-to-let investors. We will also take a closer look at the average property prices and expected price growth, as well as the rental returns and strategies that can be implemented in this city. So, if you're considering investing in a buy-to-let in Exeter, read on to gain a better understanding of this exciting market.
Visitors Per Annum 2.5m
GVA Forecasted £5.5bn
Population 135,000
Rental Growth 7.3%
Property Price Growth 5.6%
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Why Exeter is a Magnet for Residents and Investors Alike
Exeter, the second-largest city in Devon, is experiencing a remarkable period of growth and recognition. With a current population of around 130,000, projections suggest an influx of 25,000 people shortly, reflecting its burgeoning appeal. This growth is not only a testament to Exeter's thriving community but also highlights the city's increasing importance as a hub for new business and employment opportunities. Such dynamism is making Exeter a hotbed for buy-to-let investments. The city's strategic location, 36 miles from Plymouth and 65 miles southwest of Bristol, coupled with its rich cultural scene, including theatres, museums, galleries, and a calendar filled with festivals, makes it an attractive proposition for both residents and investors.
Exeter's welcoming vibe and bustling energy contribute to its reputation as a great place to live and work. It is this unique combination of factors that positions Exeter as a magnet for a wide demographic, from young professionals to retirees. In addition to its urban attractions, Exeter offers access to scenic natural landscapes. The River Exe and the nearby Barley Valley Nature Reserve provide residents with the perfect escape into nature, while the city's proximity to Dartmoor National Park and beautiful beaches adds to its allure. Shopping enthusiasts are spoilt for choice with a mix of independent boutiques, and antique, and food markets in areas like Cathedral Yard, Gandy Street, and Princesshay, further enriching the city's vibrant life. Exeter's recognition as one of the best places in the UK to retire and its status as a youthful university city underscore its wide appeal. This unique blend of urban convenience with a rural backdrop, coupled with its excellent connectivity and the abundance of green spaces, makes Exeter an irresistibly attractive location for potential investors looking to tap into the city's growing buy-to-let market.
The Fame and Cultural Heritage of Exeter
Visitors are offered an unparalleled view of the city through Roof and Tower tours, providing a unique perspective on its historical landscape. Beneath the bustling High Street lie Exeter’s Underground Passages, a network of medieval vaulted passageways that tell tales of the city's past. These passages, along with a dedicated heritage centre, offer guided tours that delve into their historical significance. Exeter's story is further unravelled at the Royal Albert Memorial Museum, where artefacts spanning from pre-history to modern times are on display. For those keen on discovering Exeter's architectural gems and hidden treasures, the Free Red Coat Guided Tours and self-guided walks like the City Wall Trail offer insightful explorations of the city's 2,000-year-old Roman wall and other historical sites. St Nicholas Priory, Exeter's oldest building, and the Exeter Guildhall, a centrepiece of civic life for over 800 years, enrich the narrative of Exeter's past. Additionally, heritage attractions like Tuckers Hall, Topsham Museum, and the historic Turk's Head pub, with its 700-year legacy, bring to life the stories that have shaped Exeter. Beyond the city walls, sites like Powderham Castle invite further exploration of the region's heritage, offering a broader context to Exeter's storied past.
Exeter's cultural tapestry is as diverse as it is rich, weaving through centuries from its pre-Roman roots to its vibrant present. The city's historical significance is epitomised by its Roman remains, inviting exploration and discovery. A crowning jewel in Exeter’s architectural heritage, the Exeter Cathedral, stands as a testament to 900 years of history.
Exeter stands as a beacon of economic growth and development within the South West of England. Its estimated population of 130,000, nestled within a travel-to-work area that spans over 470,000 residents, underpins a vibrant and diverse economic landscape. This is further bolstered by a workforce of 288,100 working-age residents, of which just under 241,300 are employed, showcasing the city’s ability to provide substantial employment opportunities. The UK Powerhouse report shines a spotlight on Exeter’s economic prowess, projecting its Gross Value Added (GVA) to reach an impressive £5.5 billion. Such a figure not only signifies Exeter's economic vitality but also positions it amongst the top 10 UK cities forecasted for GVA growth. A daily influx of approximately 35,000 commuters into the city underscores Exeter’s role as a central hub within rural Devon, alongside Plymouth. The presence of 4,877 companies registered for business rates within Exeter further illustrates the city’s conducive business environment.
The bustling city centre, with an average footfall of 1,364,000 people per month, offers a testament to Exeter’s thriving commerce and vibrant lifestyle. The University of Exeter adds to this economic vibrancy, ranked 14th in the UK by The Times and the Sunday Times, and 8th among Russell Group universities. Its contribution extends beyond education, as Exeter houses the largest cluster of meteorologists and climate change specialists in the UK, alongside award-winning research in health at the Royal Devon and Exeter Hospital and the University itself.
Investments exceeding £500m from 2011 to 2016, coupled with ongoing projects aimed at enhancing Exeter’s infrastructure, housing, university facilities, and the creation of new business and sports facilities, paint a picture of a city on an upward trajectory. The development of the Exeter Bus and Coach Station site and the introduction of an IKEA store mark significant milestones in Exeter’s ambitious plans for the future, cementing its status as an economic powerhouse within the UK.
An Overview of Exeter's Flourishing Economy
Regeneration and Future Growth in Exeter
Exeter is undergoing significant regeneration efforts across various areas. One of the major projects is the Water Lane regeneration, which Exeter City Council has identified as a substantial opportunity for urban renewal. The city centre is also experiencing redevelopment, with a £300 million project that, while reportedly under review, aims to revitalise key areas around the city. Source: Regeneration plans 'probably' under serious review - BBC News
Princesshay, the largest single regeneration in the city's history, has already transformed Exeter's economy and retail scene. Additionally, there are plans for the development of a 'health and wellbeing' campus on an eleven-acre site between Heavitree Road and Magdalen Road, which may include student accommodation. These projects are part of Exeter's broader vision for creating a liveable city, as outlined in their recently developed Liveable City Charter and the ambitious Net Zero Exeter Plan 2030. Source and brochure: 8591_liveableexeterprinciples_final_lr-1-1.pdf
The ongoing regeneration efforts in Exeter are expected to have a significant impact on the local area, given the scale of the regeneration projects and the transformation of key areas like Princesshay, it is reasonable to anticipate a positive effect on both residential and commercial property values. The economic forecast for Exeter appears promising, with the city aiming to lead the way to a low-carbon economy through its Net Zero plan. Furthermore, the Exeter Skills Strategy identifies the Digital and Tech sector as a particular area of focus for growth, which could drive demand for office space and potentially increase rental rates in this sector. The regeneration efforts, combined with initiatives like the Building Exeter Back Better program and the emphasis on creating a liveable, sustainable urban environment, are likely to contribute to overall economic growth and increased investment in the city, potentially making Exeter a more attractive location for businesses and residents alike. Source: Smart Cities World - Planning and redevelopment - Exeter develops liveable city charter
Exeter Property Market and Forecast
Average Property Prices
Detached Properties £550,000
Semi-Detached Properties £350,000
Terraced Properties £290,000
Apartment and Maisonettes £180,000
as of July 2024
Current State of the Property Market in Exeter
The property market in Exeter is currently vibrant and diverse, showcasing a range of prices across different property types. As of 2024, the average price for detached houses stands at approximately £550,000, reflecting the desirability of spacious family homes in this picturesque city. Terraced houses offer a more affordable option, with average prices around £290,000, making them attractive for first-time buyers and young families. For those seeking a compact living space, flats are available at an average price of £180,000, appealing to both professionals and students alike. Speaking of students, while specific figures for student housing are not detailed the area boasts a student population of 30,000, the strong demand in Exeter—home to a thriving university—indicates a competitive rental market, particularly for shared accommodations and purpose-built student housing.
Historical Growth and Future Outlook
Over the past decade, Exeter has enjoyed impressive growth in property prices, with an overall increase from £238,000 in 2014 to around £338,000 in 2024—an impressive rise of 42%. This upward trend has been steady, showcasing the city’s resilience and appeal. While recent data indicates a slight cooling in the market due to the UK inflation spike, the area has declined in average prices over the last year by 4%, and the long-term outlook remains optimistic. Historical trends suggest that property values are likely to continue their upward trajectory regardless of the ups and downs, albeit at a more measured pace of growth at around 4.2% per annum. Furthermore, ongoing investment and regeneration projects in Exeter are poised to enhance the city’s appeal, potentially driving demand for housing in emerging neighbourhoods. These developments are expected to create new opportunities for both buyers and investors, ensuring that Exeter remains a sought-after location for years to come.
Exploring Exeter's Buy-to-Let Property Market
Exeter’s buy-to-let property market offers attractive rental yields, varying by area. On average, you can expect yields between 4% and 5% across the city. and around 10% - 15% yeilds using short-term lettings model. Here’s a closer look at some specific areas:
City Centre
The city centre is a hotspot for students and professionals, offering rental yields between 6% and 7%. The high demand is driven by its proximity to amenities, entertainment, and the University of Exeter.
St Leonards
St Leonards is known for its community atmosphere and excellent schools. This area typically offers yields of around 4%, attracting families and professionals who appreciate a blend of urban convenience and suburban tranquillity.
Exeter's Postcodes
EX1: Yields around 4.8%
EX2: Approximately 4.7%
EX4: Higher yields at 5.6%, reflecting strong rental demand
Exeter’s thriving economy, bolstered by sectors such as education, public services, and technology, supports a robust rental market. Recent developments and regeneration projects, like those in Red Cow Village and Marsh Barton, are expected to further enhance the housing market and rental demand.
Short-Term Letting Yields and Rates
Short-term rental properties in Exeter can yield even higher returns. Expected yields for short-term lets typically range from 10% to 15% annually. This is due to higher nightly rates and the flexibility to adjust pricing based on demand and seasonal trends.
Average Nightly Rates
City Centre: Fully serviced apartments start at around £85 per night.
Student Accommodations: Rates range from £170 to £200 per week for shared and single studios, respectively.
These rates can fluctuate based on the time of year, special events, and specific property amenities. Overall, short-term rentals in Exeter present a promising investment opportunity, given the favourable yields and strong nightly rates. When seeking serviced accommodation aimed at traveling workers, it's important to consider some of the largest employers in Exeter.
Major Employers in Exeter
Exeter is home to several prominent businesses and major employers that significantly contribute to the local economy:
Pennon Group
Pennon Group is a leading infrastructure company that owns South West Water and Viridor. It serves over 2 million people and manages extensive water supply and waste management operations.
University of Exeter
One of the top universities in the UK, the University of Exeter attracts students and staff from around the world, providing significant employment opportunities and contributing substantially to the local economy.
Royal Devon and Exeter NHS Foundation Trust
The NHS is a major employer in Exeter, with the Royal Devon and Exeter NHS Foundation Trust offering a wide range of healthcare services and employing thousands of healthcare professionals.
Flybe Group
Although it has faced financial challenges, Flybe remains a notable presence in Exeter, particularly in the aviation sector. The company’s operations at Exeter Airport have historically provided numerous jobs and supported local businesses.
Devon County Council
As the local government authority, Devon County Council is a major employer, providing essential public services across education, transportation, and social services.
Michelmores LLP
Michelmores LLP is a leading law firm specializing in private wealth, real estate, and finance sectors. The firm’s strong presence in Exeter and its international practice contribute to the city’s reputation as a hub for legal expertise.
Gregory Distribution
A key player in the logistics sector, Gregory Distribution offers transport and supply chain solutions, supporting a diverse customer base from small local businesses to multinational corporations.
Scot Group Ltd (Thrifty Car & Van Rental)
Scot Group, the parent company of Thrifty Car & Van Rental, is a significant employer in Exeter, known for its extensive vehicle rental services.
Investing in Exeter’s buy-to-let market, whether through long-term or short-term rentals, appears to be a promising opportunity. For more precise yields and to determine the best investment strategy to suit your budget and needs, consider consulting property experts and conducting thorough market research.