2015 has been another great year for those invested in the property market, and early signs are that 2016 looks set to continue in the same vein. Many analysts were advising a cautious approach at the beginning of the year, mainly thanks to the looming general election. However, as we now know, these fears proved to be unnecessary as the Conservative party swept Labour aside with their majority victory.

1. A Guide to UK Property Investment for 2016
2015 has been another great year for those invested in the property market, and early
signs are that 2016 looks set to continue in the same vein. Many analysts were advising
a cautious approach at the beginning of the year, mainly thanks to the looming general
election. However, as we now know, these fears proved to be unnecessary as the
Conservative party swept Labour aside with their majority victory.
Housing had become somewhat of a political issue in the early part of the year, and
Labour seemed intent on hounding buy-to-let investors as a way of taking sides.
Generation Rent were screaming out for someone to take notice of their plight and, in
the eyes of Labour, those invested in buy-to-let properties looked like becoming an easy
target should they have gained power. Thankfully, this didn’t come to pass and the ship
looks steady once again.
Photo Credit: Martin Cooper via Flickr
The move north looks set to continue

2. The growing trend of looking outside of the southeast for property bargains looks set to
continue into 2016 and beyond. Major UK cities such as Leeds, Manchester, Liverpool,
Newcastle and Sheffield were overlooked for many years, but canny investors have
been wising up to the fact that there is value past the Watford Gap.
2015 saw increased investment in Northern England and many of these cities are now
looking to compete with London in terms of attracting young talent to join their
workforce. Or, in some cases, simply stopping them from leaving their hometowns for
the bright lights down south.
Photo Credit: vgm8383 via Flickr
Leeds is a great example of this. The West Yorkshire city has seen extraordinary growth
over recent years and is now regarded as one of the biggest financial centres outside of
London. Many young professionals from the north of the country are now opting for
Leeds rather than London to begin their careers, and the property market reflects this.
Sheffield is another area that has been transformed and one that is catching the eye of
investors who are looking away from the traditional buy-to-let areas of London and the
southeast. As with so many northern cities, industry was once the driving force behind
Sheffield’s economy. Now, however, it is tech that is attracting the bright young things of
the future to the Steel City.

3. Photo Credit: Paolo Margari via Flickr
Sheffield is now the 9th largest tech centre in the country, and all indicators point
towards it growing further still. Property prices, both commercial and residential, in and
around the traditional tech hubs of London and Cambridge are becoming unviable and
cities like Sheffield look set to benefit from the sector’s move northwards.
Is it over for London?
While the above may cast a spell of doom and gloom over the capital’s investors, it is
important to remember that London is still one of the most stable property markets
around. Overseas investors view property within the M25 as a safe bet, so it would be
foolish of us to dismiss the city out of hand.

4. Photo Credit: trevorklatko via Flickr
The problem with investing in London property is that it is a saturated market. With so
many investors vying for the same premises, prices are at a premium and good
prospects are hard to come by. That being said, there are still a few boroughs that could
prove to be worth considering as we move into 2016:
Newham Crossrail set to open in 2018. Already home to ExCeL and City Airport.
Croydon
Huge investment being made here and relatively low house prices compared
with the rest of the capital.
Camberwell New developments and improved crime figures mean Camberwell is on the up.
Tower
Hamlets
Whitechapel is finally catching up with the rest of Tower Hamlets. New
developments and lots of investment make E1 an interesting proposition.
In depth:
 Newham – Surprisingly, Newham has yet to take off in the way that many
expected it to as far back as the late 90s. Surely it is only a matter of time before
the borough that calls both the ExCeL Exhibition Centre and London’s City
Airport home will begin to show its true potential. Another reason why Newham is
on so many investors list for 2016 is Crossrail.

5. Photo Credit: zoer via Flickr
Set to be completed in 2018, Crossrail is going to make a massive difference to this part
of East London. With all that is going on around Stratford and Hackney, places like
Manor Park look set to attract the young professionals that have transformed other
areas in close proximity to this part of London.
 Croydon – Croydon is another underperforming part of the capital that could see
2016 as its year to come out of the doldrums. House prices here are already on
the up and there is investment coming into the borough too, with two large
shopping centres set to open soon. Anyone doubting the amount of investment
being made here need only look up at the skyline. There are cranes everywhere,
and work is being carried out at a frantic pace to transform this part of south
London.

6. Photo Credit: jo.sau via Flickr
 Camberwell – Camberwell had a terrible reputation not so long ago. Extreme
crime rates left the borough untouchable for many years, but things are changing
right across this part of south London. Neighbouring Brixton’s popularity has
exploded, and Camberwell is seeing the knock-on effect as those who now
cannot afford property in SW2 move on to SE5.
There are currently developments being built in the area too with over 160 properties
set to come on to the market in Edmund Street alone. Add to that the fact that there are
proposals in the pipeline that could see the Bakerloo Line extended to Camberwell and
it’s easy to see why the southeast borough is getting attention from investors at long
last.

7. Photo Credit: sarflondondunc via Flickr
 Tower Hamlets – Namely Whitechapel. While the rest of Tower Hamlets has
seen action over the last few years, Whitechapel has remained relatively
untouched – until now. New developments are springing up all over the place
and with the areas close proximity to the city many are touting Whitechapel as
the next big thing. Expect to see the old existing Victorian houses get a new
lease of life over the coming months and years as Whitechapel gets the
makeover that much of East London has already had.
Beyond the capital
As we have already touched upon, much of the current interest in property investment is
focused further north than would have been the case a decade or so ago. Unfortunately,
however, it is not as easy as simply avoiding the capital to ensure success in the buy-to-
let market.

8. Photo Credit: Mark Moz via Flickr
One reliable indicator to take into consideration when looking for a favourable location
to buy an investment property is the average rental yield that is being reported in your
area of choice. So, with this in mind, let’s take a closer look at some of current high
performers across the UK in terms of individual postcodes:
Best postcode performers in terms of yield
S1 – 11.57%
BD1 – 9.02%
G21 – 9.02%
MK9 – 8.89%
G2 – 8.81%
SO17 – 8.62%
G44 – 8.38%
B18 – 8.28%
LS6 – 8.19%
G40 – 8.16%

9. In depth analysis:
 Birmingham – The UK's second city has been subject to a number of
regeneration projects over the last few years and the local property has seen an
upturn too. Yields in Winson Green, Hockley (B18) recently made the top 10
rental yield postcodes for the whole of the UK with an impressive 8.28% return.
Photo Credit: Neil Howard via Flickr
 Glasgow – Another top performer is Glasgow. Much maligned for many years,
Glasgow is undergoing somewhat of a renaissance and the housing market is
being carried along with the city’s rise in popularity. Many analysts are currently
stating that Glasgow is possibly the best place to invest in for 2016 and beyond,
and the statistics bear this out. Glasgow has a staggering four postcodes in the
top ten for rental yields:
o G21 – 9.02%
o G2 – 8.81%
o G44 – 8.38%

10. o G40 – 8.16%
Photo Credit: Robert Orr via Flickr
 Bradford – Bradford has been one of the UK's best kept secrets for some time
now, but the cat was let out of the bag when the BD1 postcode stormed into
3rd place on the top rental yield table with a 9.02% return. Bradford is seen as a
young and vibrant town with a good cultural mix within its borders. Many young
families have moved to Bradford in order to take advantage of the good
schooling on offer and the benefit of having a lively city centre coupled with
breathtaking countryside a short distance away.
 Southampton – Southampton’s local economy is thriving thanks to its ability to
attract top name businesses to the area. Southampton port is one of the largest
in the whole of the UK and the county also has a busy airport that connects this
part of southern England with 43 European cities. For those looking to invest in
property, it is often the four universities here that offer the best prospects for buy-
to-let, with over 55,000 students enrolling each year. The postcode SO17 is

11. currently returning a highly respectable 8.62%, putting it 6th in the rental yield
table.
Photo Credit: Steve via Flickr
 Milton Keynes – Property investment has taken off in Milton Keynes over the
last few years, and 2016 looks all set to carry on that trend. Located in the heart
of the United Kingdom, Milton Keynes is currently recognised as the fastest
growing city in the country and its population has more than quadrupled over the
last fifty years. £1 billion of private investment was made in the last ten years and
the property market is on the up. MK9 found itself in 4th place on the rental yield
table with a return of 8.89%.
 Leeds – As we have already mentioned, Leeds is now regarded as the second
largest financial district in the UK and is a city that is attracting young
professionals in their droves. While property prices may be slightly higher here
than in many of the aforementioned areas, rental yield still remains decent. The
LS6 postcode crept into the top 10 at number 9 with an average return of 8.19%.

12. Photo Credit: Mike Kniec via Flickr
 Sheffield – The last city on our list is another that we have already spoken about
in this guide, but it is also the best performing too. Sheffield City Centre (S1) is
currently returning a truly astonishing 11.57% rental yield, making it the pick of
the postcodes at present.
Taxation in 2016
The main taxation changes made in this year’s budget are not due to land until April
2017, but there is one change that landlords should be aware of for 2016. The
automatic ability to claim 10% against wear and tear costs will disappear in 2016, with
landlords only being able to make a claim as and when the need arises.

13. Photo Credit: Philip Taylor via Flickr
Some landlords are expected to increase their rental charges early in 2016 to offset the
upcoming changes to tax relief on interest payments. As of April 2017, landlords will
only be able to claim a maximum of 20% tax relief as opposed to the previous levels of
40 to 45%. The change will be introduced gradually over a four-year period, but many
landlords will make incremental changes to their charges prior to the new ruling coming
into effect.
Property investment and pensions
As the cost of living steadily rises, so a regular income during retirement becomes more
and more important. A recent report by insurer Aegon stated that the amount of money
people would like to have each year during their retirement has risen from £35,000 to
£42,000. In order to achieve anywhere near this figure an individual would need a
pension pot somewhere in the region of £1m.

14. Photo Credit: J D Mack via Flickr
Buy-to-let offers an attractive solution as your investment can be made late in life, and
you will not only receive capital gains from the property but also a regular income from
the rent, too. With life expectancy on the increase and ever decreasing state pensions,
opting for a buy-to-let investment in 2016 could be a great way to achieve the standard
of living you desire once you hit retirement age.
Final thoughts
2016 looks on course to carry on where 2015 is predicted to finish. The UK property
market is a resilient beast and, with the general election a distant memory, things are
looking good for the year ahead.
Despite the growing number of buy-to-let investors entering the market, opportunities
still abound. By doing your research and choosing wisely, a buy-to-let property could
give your investment portfolio a welcome boost in 2016.
Feature image credit: Sergei Karpukhin via 123RF