Discovering the Prospects of Wolverhampton: A Guide to Buy-to-Let Investments
Welcome to Wolverhampton, a lively and thriving city located in the heart of the West Midlands. Wolverhampton offers a range of opportunities for potential investors and residents alike. With a population of over 260,000 and a strong economic appeal, it's easy to see why this city is becoming an increasingly popular choice. In this guide, we will explore what makes Wolverhampton a desirable location including its affordable average property prices, historical growth rates, and expected rental yields. We'll also take a closer look at the upcoming regeneration and investment projects in the area, providing you with a comprehensive overview of the potential opportunities for buy-to-let investments in Wolverhampton. Read on as we discover the prospects of this dynamic city and how it could be the perfect place for your next property venture.
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GVA £5.3bn
Population 264,000
Property Growth 3.1%
Rental Growth 6%
Why is Wolverhampton a Popular Place to Live and Invest?
Wolverhampton is a popular city with a rich industrial history. It has a history of developing Staffordshire coal and ironstone deposits and is renowned for its metal manufacturing industries since the late 18th century. Nowadays, Wolverhampton has a diverse range of production, including paints and rubber tyres. Being located in the Midlands, Wolverhampton has easy access to major cities such as Birmingham, Coventry, and Manchester, making it an attractive location. The city has undergone significant regeneration, which has sparked several key redevelopment projects. One of the projects was the transformation of the former Sunbeam Factory into luxury apartments, which has contributed to a steady increase in property prices. This regeneration has made Wolverhampton a prime location for property investors. There is a broad range of properties that suit various budgets and lifestyles, from chic city apartments to suburban family homes. Wolverhampton has excellent transport links, including a train station that offers direct routes to London and other major cities, as well as efficient bus and tram services. Wolverhampton's thriving business community and high quality of life make it an attractive destination for professionals. With all these factors combined, Wolverhampton's popularity as a place to live and invest is set to continue.
The Population and Growth Rate of Wolverhampton
In 2011, Wolverhampton had a population size of 249,500 which saw a significant increase to 263,700 in 2021, indicating a growth rate of 5.7%. This growth is somewhat consistent with the overall population increase for England, which stands at 6.6%. Neighbouring areas have also experienced similar growth with Walsall showing an increase of 5.5%, Dudley 3.4%, and South Staffordshire 2.2%. This rise in Wolverhampton is marginally less than the overall growth in the West Midlands region, which is 6.2%. Interestingly, some local authority areas like Kensington and Chelsea have witnessed a decline in population, with 15,200 fewer people, a drop of 9.6%.
In addition to its growing population, Wolverhampton boasts of a thriving job market. As per Indeed.com, over 22,080 jobs are available in the city, further enhancing Wolverhampton's appeal as a favourable location for those considering a move.
Wolverhampton's Economic Appeal
The bustling City of Wolverhampton is a vibrant and thriving metropolis, forming a part of the Birmingham and Black Country conurbation, and boasting a catchment of 1.73 million people within a convenient 30-minute drive time. Recognised as one of the top ten growing economies in the United Kingdom, Wolverhampton is experiencing an unprecedented influx of private and public investment, with regeneration projects throughout the city amounting to an impressive £3.7 billion, including £992 million currently on-site or planned in the city centre alone. With excellent road, rail, and air links, the city is ideally situated at the heart of both Britain and Europe, boosted further by the recent £132 million flagship transport interchange project.
The project, backed by both private and public investment, features a single integrated city centre transport hub, accompanied by brand new prime office and retail accommodations at i10, and a £35 million refurbishment of the city's main retail centre. Thanks to its central location and superior connectivity, Wolverhampton has already established itself as a magnet for top-tier firms such as Jaguar Land Rover, Marstons, Moog, UTC Aerospace, and Wiggle, all of whom recognise the immense value of the i54 strategic employment site located north of the city. Notably, this site is currently the most successful enterprise zone in the entire country, bringing an abundance of high-quality jobs to the area. The recent £1 billion investment by Jaguar Land Rover in a new engine plant at the i54 site created over 1,400 jobs, along with several hundred more in the supply chain. Despite already excelling in high-value manufacturing and construction, the city is also rapidly developing clusters in other key sectors, while simultaneously investing heavily in skills training and matching local people to suitable jobs. Furthermore, Wolverhampton's strong culture, entertainment, sport, leisure, and housing offerings underpin the city's flourishing economy, which is expected to grow at a rate of 2-3% faster than the national average over the next decade.
Despite its tightly drawn administrative boundary, Wolverhampton is continuing to work closely with neighbouring authorities to support growth in its functional economic area, with plans for a 100-acre extension of the i54 site that has the potential to create up to 3,000 additional jobs. Although the city had started from a low skills and employment base, it has already begun to show significant improvements, with an increased share of the population with NVQ4+ qualifications, growing at higher rates than the average for England, and all other local authorities in the Black Country. The future is indeed bright for the City of Wolverhampton, and its prospects for further economic growth and development seem nothing short of excellent.
Upcoming Regeneration and Investment in Wolverhampton
The updated Wolverhampton Investment Prospectus, authorised by the City of Wolverhampton Council's Cabinet on 22 February 2023, is a dynamic, interactive online tool. Designed to reflect modifications in project development, economic shifts, and stakeholders' needs, it is updated regularly for relevancy. The most recent version is accessible via the link provided below. In our quest for continued development, we are collaborating with city associates and invite active involvement to mould this online document to encapsulate upcoming project evolutions and delivery strategies.
Investment Potential - Our dedication lies in collaborating with aspiring investors and developers to realise these promising ventures. We assure consistent, robust, and pioneering city guidance. Therefore, consider the city abundant with possibilities for your business endeavour.
Interchange Commercial District - This expansive area will provide 1 million square feet of premium grade A office space, ideally situated in the core of an interconnected regional transport network encompassing roads, railways, and tram services. Project Details: Region - West Midlands. Sector(s) - Office, Food & Beverage, Leisure. Type of Investment - Equity investors, operators. Planning Status - Included in the local area plan. Gross Development Value - Estimated at £50m.
St Georges - We present an exceptional redevelopment opportunity in this strategic site. Situated in a prime location, it has connections to the Royal, the forthcoming City Learning Quarter, and the central city district. This site encompasses a Grade 2 former Sainsbury's outlet, alongside accompanying open-air parking areas. In 2018, the City of Wolverhampton Council became the proprietor, framing this as an exciting strategic redevelopment potential. Project Particulars: Region - West Midlands. Sector(s) - Educational Institutions, Residential. Type of Deal - Development Financing. Planning Status - Allocated in the Strategic Local Plan. Type of Development - Brownfield. Estimated Gross Development Value - Between £50-99m. Anticipated Timeline - 1-2 years. Size of Development - 5.4 acres.
Wolverhampton Science Park - Over 100 businesses from varied sectors, such as med-tech and life sciences, proudly call the Science Park home. Given the escalating demand for additional commercial space, this location serves as a critical hub for the digital economy and aerospace. Here, you will find the Centre of Excellence for Advanced Manufacturing & Digital Innovation Hub, boasting incubator space and startup units. The University of Wolverhampton's vision to establish a Centre of Excellence for Digital Innovation in Smart Cities is brought to life at the Wolverhampton Science Park.
Brewers Yard - Project Insights: Anticipated Planning Status: Preliminary application set for March '22 submission, paving the way for approximately 550 residential units. Investment Prospect: Through a strategic public-private delivery partnership, we aim to engage investors and occupants in this dynamic, residential-led, mixed-use redevelopment project. The alliance facilitates swifter site readiness and expedited delivery, leading to phased investment opportunities, effectively mitigating risks for regional, national and international funding institutions. Sponsor: Collaborative effort between City of Wolverhampton University and Court Collaboration. Investment Modalities: Opportunities for forward funding, development funding, and PRS fund contributions. Estimated Scope/Value: A massive £250m GDV. Sector: Combined Public and Private Sector Initiative. Projected Timeline: Commencement expected in 2022.
The Average Property Price and Historical Growth Rate in Wolverhampton
Wolverhampton, while not very well-known in the UK property market, is one of the country's largest cities and offers a compelling investment opportunity. As of June 2023, the average property price in Wolverhampton was approximately £200,000, which is significantly lower than the national average of £285,000. It's worth noting that detached homes tend to be the most expensive, followed by semi-detached properties, terraced houses, and flats. Although Wolverhampton's property price growth is showing signs of slowing down due to inflationary impacts, it still outperforms the national average during this financial period where we witnessed the inflation rate hitting double figures, leaving plenty of room for future growth. According to the renowned property company Savills, the West Midlands is expected to see a 20% capital growth by 2028, surpassing the UK's capital growth prediction of 18%. The city's ongoing regeneration projects are likely to stimulate property price growth. For instance, in October 2023, the City of Wolverhampton Council approved a deal with the English Cities Fund for its City Centre West Quarter regeneration project, which will transform the city's west side into a lively new quarter.
Expected Rental Yields in Wolverhampton
Wolverhampton presents an appealing proposition for buy-to-let investors, underscored by the city's average annual salary of £32,000. Rental income averages at £958 per month, rendering the cost of living more affordable compared to the national average. The city is notable for its higher-than-average rental yield of approximately 6.5%, making it a fertile ground for investment. This is buoyed by a considerable student demographic, heralding robust demand for accommodation. The rental market’s vitality is further bolstered by the burgeoning interest in properties for serviced accommodation. With an average nightly rate of £70, peaking at around £160, the sector shows remarkable potential for growth, particularly given the current shortfall in short-term letting options. Investors venturing into serviced accommodation can expect up to 14% gross yields, given the right property, area, and management team alignment. This investment avenue is especially lucrative due to the significant presence of large corporations within Wolverhampton, such as Collins Aerospace, which boasts over 10,000 employees. Other major companies like Amazon and Jaguar Land Rover also contribute to a sizable workforce, necessitating accommodation solutions for over 10,000 staff members in the area. This corporate presence not only ensures a steady demand for both long-term and short-term lettings but also opens up avenues for investors to target specific sectors for higher returns. With such a promising landscape, savvy investors are keenly exploring the serviced accommodation sector, leveraging Wolverhampton's vibrant economy and its ever-growing demand for versatile housing solutions.
Overview
Wolverhampton emerges as a city teeming with potential for buy-to-let investors, underpinned by its dynamic growth, economic resilience, and strategic regeneration initiatives. Its appeal is multifaceted, from the competitive property prices and high rental yields to the substantial public and private investments fuelling its development. The city's population is on an upward trajectory, reflecting its increasing popularity and demand for housing. Economic indicators are promising, with significant employment opportunities and sectors poised for expansion, making it an attractive destination for professionals. The forthcoming regeneration projects not only promise to revitalise the urban landscape but also to catalyse further economic and social growth. With the projections of property value appreciation, Wolverhampton represents not just a safe, but a potentially lucrative investment avenue. Investors have a unique opportunity to capitalise on the city's growth phase, leveraging the high demand for both residential and serviced accommodations. As Wolverhampton continues to evolve, it solidifies its status as a compelling choice for those looking to invest in a city with a vibrant future.