Preston Property Investment Guide

Preston is worth £8.1 billion economically and is on a steadily upward trend. In 2018 the city was declared the most improved city in the PWC Good Growth for Cities report, and in 2019 was named the best city to live in the North-West. In more recent times, Preston won the Green Flag Award for its six popular green spaces across the city. Preston’s popularity with the buy-to-let market is consistently increasing due to its coupled low affordable housing and high rental demands. The city also receives a yearly population growth of 5.5% which is larger than the North West at 5.2%.

The overall population of Preston currently stands at over 330,000 with 40,000 being students who reside here due to the popularity of The University of Central Lancashire (UCLan), one of the UK’s largest. The city itself does offer a variety of property types with most of the city offering self-contained studios, loft-style one-two-bedroom apartments, duplexes, and townhouses. A whopping 64% of students who graduate from the university stay and reside within the city sourcing jobs locally; making the student, young professional, and starting families the main tenant profiles.

• Fulwood’s average property price of £197,000

• Ribbleton’s average property price of £139,000

• Preston City Centre’s average property price of £188,000

Preston City Center

Since the financial crisis of 2008 and the lack of investment in the city leading up to around 2013, property prices only steadily increased during this period, unlike the majority of UK cities. The City Deal, £440 million was agreed in 2013 which kickstarted regeneration creating 20,000 new jobs in less than a decade and over £1bn in economic growth. The travel and tourism sector of Preston also received a huge boost from 2014 onwards with over 7 million tourists visiting Preston each year - a large portion of which was due to re-location workers residing in the city. With the university being located in the heart of the city, The University of Central Lancashire has recently invested a further £200m in its all-new education sectors; now offering a new media hub and a new engineering sector. This has boosted local businesses and rental demand for smaller properties such as Self-contained studios, homes with multiple occupations or one-bedroom apartments. Cranes are still the skylight of the city due to ongoing investment which has transformed Preston into a very busy, young, professional and student market.

The Harris Quarter Towns Fund Investment Programme 2021-2026, is a £200m transformational regeneration programme. This will include a new £40m cinema and leisure complex on the doorstep of Preston Markets and refurbishment of the famous Museum and Art Gallery. The HS2 will also connect with Preston which will boost transport to Manchester, Liverpool, London, and Birmingham.

Regeneration and plans that are ongoing or in the pipeline

Preston City Living Strategy - £430m start which should bring in a further £2.3bn in public investment to transform city centre living.

Harris Quarter Regeneration - £200m new cinema and leisure complex within the city, focusing on cultural and leisure facilities, also regenerating life into Preston’s iconic listed buildings.

Preston City Investment Plan 2020/2035 - Ambitious vision to completely transform the city. Supporting its people through sustainable shared prosperity for the local community. The long-term plan will also play a key role in Preston's recovery from the effects of the coronavirus pandemic.

Property Prices And Growth

The overall average property price in Preston stands at £180,000. Investors can still find the odd bargain especially when browsing apartments within the city from prices around £120,000, and student properties starting from around £75,000. In the last 24 months prices within the PR postcode have risen by around 12%, but took a slight decline of -1% towards the end of 2022 due to the uncertainty of the financial markets. Due to the amount of regeneration, past and present still in the pipeline for Preston, it is a price growth baseline of around 4% per year, however, a larger spike circulating the HS2 arrival.

With the increase in UCLan educational sectors and the upgrade of campus accommodation, lack of new homes, and healthy job supply, Preston offers a great return on investment through rental profits with a solid outlook for prices to continue on the upward trend.

Rental Market And Demand

Student Sector:

The University Of Central Lancashire student community of around 40,000 with only 2,000 on-site accommodations. This leaves a big gap between demand and supply, especially on campus. The University will continue its course of growth with a further £100m in the pipeline for creating new educational wings. Rents in this area for a self-contained studio vary from £135-£175 per week as of 2023, which due to the lack of accommodation rental increases are at a healthy rate of 5% per year. Prices for student accommodation vary from £60,000-£85,000 creating a secure, yearly high rental profit for investors from 7%/11% yields.

Serviced Accommodation Sector:

Preston is home to some of the UK’s largest businesses’ BAE systems, for example, investors in this sector are highly likely to attract re-location workers when advertising on this model. Over 7 million people visit the area per year which will create a large demand given the lack of short-let accommodation on the market. Average nightly rates in this area vary from £65 per night upwards of £120 per night during peak seasons. Properties within the city demand a higher nightly rate rather than the outskirts. Here are some of the local businesses you are likely to work with on this model when they relocate staff into this area:

Overview:

Preston has never been an overpriced market due to its slow growth in past years, which means of course property investors can pick up some great deals within the city which offer secure rental profits. The broader picture that investors should consider is Preston property prices eventually catching up with the rest of the market in the UK due to the ongoing regeneration programs. The city offers a great haven for those seeking high rental returns and a solid long-term investment for those targeting capital growth, the earlier you invest in Preston the better the results.