When it comes to property investment, location is key. And one town that has been garnering increasing attention in recent years is Middlesbrough. It is a promising option with its affordable housing market, growing economy, and various regeneration projects. But is Middlesbrough really a good place to invest in property, and what returns could you expect? Whether you’re a seasoned property investor or are just starting out, keep reading to find out.
Why invest in Middlesbrough?
According to the Financial Times’ European Cities & Regions of the Future Report 2022/23, Middlesbrough is among the top European investment destinations. And there are a number of reasons that we can think of to justify this accolade.
Following the decline of the town’s steel industry almost a decade ago, Boro’s economic future was unclear. However, it now boasts a new manufacturing park and thriving chemical, logistics, healthcare and digital industries. Additionally, the town is home to a 20,000-strong student population from all over the world, which ensures rental demand remains high.
Middlesbrough is also well-placed for professionals commuting to other northeast towns and cities. At the same time, families benefit from the town’s proximity to the coast and the countryside.
Is Middlesbrough up and coming?
Middlesbrough’s population has grown significantly over the last decade, and another 7,000 new homes are set to be built by 2029. Other key growth indicators include the number of startup companies using Boro as a base, plus recent investments in leisure and education facilities – including Teesside University and a new Northern School of Art Campus.
On top of that, Middlesbrough’s bustling independent quarter and a growing number of bars and restaurants highlight its appeal to younger generations. And if that wasn’t enough, the train station is also being upgraded to help improve the town’s public transport connections.
Best areas to invest in Middlesbrough property
With all of the above in mind, here’s our top picks when investing in Middlesbrough property:
Town Centre – TS1
(Mostly terraced properties – avg. sale price of £74,788)
The town centre’s sizeable student population means demand for good quality rental homes in the heart of Boro often outstrips supply. Buying an affordable property here could be well worth the investment, provided it’s in good condition. Better still, you won’t need an HMO license if it has less than five rooms for rent (4 or fewer tenants sharing).
Linthorpe – TS5
(Mostly terraced properties – avg. sale price of £119,979)
Situated west of Middlesbrough, Linthorpe is a popular neighbourhood for first-time buyers, plus renting professionals and families. Here, you’ll find a number of Victorian and Edwardian terraces – larger and in better condition than those in TS1. Plus, attractive semi-detached homes on tree-lined streets are all just a stone’s throw from shops and restaurants.
Acklam/ Tollesby – TS5
(Mostly semi-detached homes – avg. sale price of £170,784)
These neighbouring suburbs are slightly further out than Linthorpe but are equally popular. Acklam and Tollesby are well connected by road and are surrounded by greenery. Yet homes here are much more affordable than those on the opposite side of the A174. The area also boasts one of Middlesbrough’s top-rated secondary schools – Outwood Academy Acklam.
Berwick Hills/ Park End – TS3
(Mostly semi-detached homes – avg. sale price of £85,409 – £96,615)
Looking for a family-friendly area near the town centre but away from the hustle and bustle of the student district? Then Berwick Hills or neighbouring Park End are both great options. Homes here are typically more spacious, with gardens and driveways. The area also has a number of green spaces, supermarkets and local shops, and a leisure centre with a pool.
Marton – TS7
(Mostly semi-detached homes – avg. sale price of £167,077)
Less than 3 miles south of Boro town centre, you’ll find leafy Marton and ever popular Stewart Park. Despite its village-like feel, Marton has a bustling parade of shops, several pubs and a cricket club. Not to mention a local museum and multiple primary schools. And for commuters, this suburb also has its own train station. Otherwise, both the A174 and A172 run through it.
What makes a property a good investment?
Considering investing in a Middlesbrough property? Then, you’ll need to evaluate several factors to determine its potential for income generation and appreciation in value over time.
Location
Firstly, location plays a critical role in the success of a property investment. Homes in desirable areas with good schools, parks, shops, places to eat, and easy transportation links attract the most tenants and future buyers. In Boro, this includes inner suburbs like Linthorpe and Acklam and wealthier outer suburbs like Marton and Nunthorpe. Meanwhile, students will look to rent closer to the University in TS1.
However, you may struggle to let houses in less desirable areas like Grove Hill and South Bank. So, while homes in places like these are cheaper, bear in mind that vacancy rates are higher. And rents are lower too – which leads to our next point.
Potential income vs expenses
Analysing rental market trends and calculating expenses is also key to establishing whether a property can generate positive cash flow. To assess profitability, you’ll need to factor in mortgage payments, insurance, maintenance costs, and vacancy rates alongside average rents. For example, student lets are often vacant over the summer, so you may need to charge more during term time. Likewise, while Coulby Newham and Nunthorpe are sought after, homes there are relatively expensive – not ideal if you plan to rent them.
Property condition
Another crucial aspect to take into account is the condition of the property. A well-maintained, structurally sound property is more likely to attract tenants and require minimal upkeep. This will save money and hassle down the line. With that in mind, conducting a thorough inspection of a property before investing is essential. Also, research by Michael Poole suggests that sturdy ex-council houses with gardens make suitable rental investments. In contrast, new builds are less popular and may even depreciate as more are built.
What is the average monthly rent in Middlesbrough?
If we’ve piqued your interest and you’re keen to know what returns a Middlesbrough property investment could offer, look no further. Home.co.uk says the average monthly rental income in this northeast town is currently £715 across all neighbourhoods. Meanwhile, for homes closer to the town centre in TS1 and TS3, rents typically range from £584 to £678pcm. Given the affordability of homes (particularly in central Middlesbrough), this means you could enjoy a healthy rental yield of 7.85%. That’s noticeably higher than the UK average of 5.49%.
Are house prices falling in Middlesbrough?
Despite Boro’s continued growth, average house prices remain low, at just £119,197 – that’s less than half the national average. Yet, annual rental growth in the town is currently an impressive 10%. As a result, if you’re after a cheap property to invest in and rent out, choosing one in Middlesbrough could make a lot of sense.
However, while sale prices are down 5% on 2022, they’re still 2% higher than pre-pandemic figures. And, with mortgage interest rates starting to even out, more homes will likely sell this year. As such, you can expect prices to begin to rise in Middlesbrough in the near future, so act fast. You can also find out more in our dedicated Boro property market forecast.Already own a house in Boro and need help selling it sooner rather than later to fund your next investment? Whether you’re looking to sell a tenanted property off Albert Road or a detached home on the outskirts, we can help. We will pay cash for your home regardless of age, condition or location. Get a free offer online to get started, or give us a call on 0800 774 0004.
