Looking for a rental property in Leicester and not sure where to start? You’re in the right place. Leicester, like any other major city, is made up of many different areas. Some of these are more in demand for various reasons, which can make finding the perfect property somewhat difficult but not impossible. Quite simply, it is competitive, so you need to be prepared. However, in this article, we’ll cover everything you need to know about the rental market. So whether you’re looking to rent a property or purchase a buy-to-let property in Leicester, we’ve got you covered.
Let’s get started.
Demand for rental property in Leicester
The demand for rental property in Leicester is made up of many different types of tenants, which plays a big part in the overall demand for rental property in the area.
Student tenants
Leicester is home to two universities, De Montfort University and the University of Leicester, which are located less than a mile from each other. Additionally, Loughborough University, another popular institution, is located around 12 miles away. As such, there is a very large student population with a vested interest in living in the city centre. As we’ve mentioned previously in our tips for choosing investment property in Leicester, student tenants provide a great source to ensure properties are always in demand.
Now, student tenants may not be the ideal tenants for some landlords; however, they do make up a large proportion of the tenant population of Leicester. Most student tenants will ideally seek properties located in and around the city centre area as it is close to nearby amenities as well as the universities.
Working Professionals
Another important group of people interested in renting properties are working professionals. With Leicester being home to many large companies and institutions while being a great commuter city for other large cities, many choose to live in Leicester while they work. These tenants usually look at the suburbs for rental properties as it makes for an easier commute, while those working in the city would look for somewhere close to their office.
Families
Families will typically look for quieter areas to rent properties where the schools are also located close by. This is where areas like Oadby and Clarendon Park come into play, as they are in ideal proximity to local amenities such as schools and parks for families.
So, as you can see, there are many different types of people actively looking to rent in Leicester, while there sometimes aren’t enough properties to go around, which creates a competitive rental market. In fact, in 2022, it was reported that the number of available rental properties had dropped by over 1000 to just 2579. At the time of writing, there are currently 1048 properties listed as available to rent in the city.
Current Leicester rental yields
If you’re still asking the question, is it worth investing in property in Leicester, then you need to take a look at the rental yields to get a clearer picture. You’ll be pleased to know that Leicester has historically always had high rental growth. In fact, in 2018, the city achieved the status of having the highest rental growth in the country. Since then, there have been no signs of slowing down; in fact, late last year, it was predicted that Leicester would witness the highest rent growth in the UK from 2023 to 2027.
The rental yield in Leicester currently varies by postcode. Some of the lower-performing postcodes, like LE8-LE10, have a rental yield of 3.6%, whereas better-performing areas, like LE1, can return a rental yield of 6.4%.
The reason behind this again is that the demand is much higher in certain areas than others due to the amenities available in the area. We’ll cover some of the best areas below.
Current average rental prices in Leicester
So, as we’ve covered, rental prices have increased in Leicester, but just by how much? Well, at the time of writing, the average rental price in Leicester is £1,098 per month. However, the average rental prices vary further by the type of property. Here’s a quick breakdown:
- Room £785 pcm
- Flat £1,021 pcm
- House £1,254 pcm
However, to put this into perspective, according to Zoopla, the average rent in the UK is now £1,220 per month. So Leicester’s almost £1100 average rental price isn’t too far off the national average, and houses are definitely above the national average. With that said, certain areas are definitely better than others when it comes to rental prices. Let’s take a look…
Buy-to-let areas in Leicester
One of the most important tips for choosing investment property in Leicester is to pick a good area. With that said, where are the best areas? Below we;ve offered our top three suggestions; we’ve also included average prices for property from Zoopla.
Oadby
Another great buy-to-let area is Oadby. It is located 15 minutes or four miles from the city centre. The area provides more of a suburb great for families. This is especially due to the local amenities that include schools and other essential amenities for families. It provides the perfect place for families with a quiet area while the bustling city centre is only a short drive away.
At the time of writing, the average property price stands at £371,806. This is definitely one of the more expensive places to purchase property, but there is a high demand for properties that is unlikely to be reduced any time soon.
Clarendon Park
Clarendon Park is one of the most sought-after residential areas of Leicester. It’s no surprise that there is definitely competition when it comes to purchasing property here. It’s not just other investors but families too who are looking to purchase their dream home. The biggest selling point for this area is how close it is to the city centre. The short 2.5-mile drive provides access to the main amenities that Leicester has to offer.
Additionally, the area provides access to some of the best schools that Leicester has to offer, making it perfect for families. The average property price here in Clarendon Park is currently £425,000.
City Centre
The city centre is of course the main area of Leicester where many young people look to rent a property. Whether they’re students or young professionals, it makes sense to live close to the centre.
Properties in the city centre are made up of mainly apartments. As a result, the average property price here is around £134,321. As mentioned above, flats in Leicester, on average, provide a monthly rent of around £1021. So, depending on the size of the flat, you can get a good monthly yield here. However, bear in mind that properties in the city centre are affected by being on leasehold, which can deter many buyers. However, it is still a great place to purchase a buy-to-let property.
Struggling to find renters & hoping to sell your tenanted property? We can help
If you’ve made an investment into a property and find yourself struggling to find someone to rent your property, we can definitely help. Sometimes, buy-to-let properties may be a location where you’re limited as to what type of buyers are interested. For example, flats are usually not purchases made by families who make up the most common type of buyers and instead are more popular amongst other investors. As such, if they find your property isn’t as popular as others, you may struggle to find someone else willing to take the risk. However, we act as cash house buyers, and we make offers on all types of property regardless of the location. In fact, we take into account the current market value of your property rather than your personal situation to ensure that we offer a fair cash offer for your property.
Additionally, if you’re looking to sell a tenanted property, we can also purchase your property and respect the current tenant’s contract throughout. Get in touch to find out more.
