Why invest in North Wales property? 20/07/22

North Wales is renowned across the world for its vast mountainous landscape. For this reason, around 30 million tourists visit this rural region of Wales every year where the Snowdonia National Park is wholly based. Consisting of mountains, waterfalls, and trails, Snowdonia is the largest national park in Wales. This, combined with its coast (on the Irish Sea), has led tourism to knock farming off its longstanding perch as the principle economic force in the area.

Despite it being sparsely populated, North Wales has a population of around 696,000- more than the Northern Powerhouse giant, Manchester, according to Welsh Government figures. They also add that this region has the highest employment rate, the lowest unemployment rate and the highest household income of any Welsh region.

How is the property market performing in North Wales?

Property investors diverting their attention towards North Wales in the pursuit of lucrative property investments are certainly looking in the right place. Property prices in North Wales are around 30% lower than anywhere in the UK. According to HM Land Registry figures, the average house price in the UK is currently £234,742, meanwhile the average house price in Wales is currently just £165,135. It is clear that North Wales presents investors with the opportunity to snap up some serious bargains, with some buy-to-let properties priced as low as £35,000!

Rental demand in North Wales is generally positive; However, demand will vary from region to region. In some areas, the demand for buy-to-lets consists predominantly from the local market. In many other parts of North Wales, there is significant demand for holiday lets or student lets. According to Homelet, rents rose by a healthy 5.5% over the last year across Wales. With this in mind, along with below UK average house prices, property investors can expect to find generous rental yields here.

Where are the 3 best buy to let areas in North Wales to invest?

Bangor (LL57)

Bangor is one of the smallest cities in the UK with a population of around 18,800. Despite its small size, Bangor has more than enough amenities for everyone. It even has the region’s largest service and shopping centre and is said to have the UK’s longest High Street comprising of national chains and a range of independent shops. The city is widely known across the UK for its exciting social life but more commonly, the bags of culture it has to offer. So much so, Bangor made its name as one of the top ten most cultured cities in the UK.

Despite it being most popularly used as a residential location, it is important to note that ‘the city between the mountains and the sea’ is also a highly significant university city- a large proportion of Bangor’s economy is based around Bangor University. Hosting around 10,000 students and employing roughly 2,000 people locally, the university is a key contributor to the local economy. Student cities have countlessly proven to be the most desirable for property investors due to its increased certainty of sustained yearly growth, just look at the property market in Liverpool, Manchester or Leeds.

It's clear that Bangor is no exception of this, with the average current asking price reaching £255,744, according to figures from Zoopla. This is after experiencing a surge of buyers pushing house prices across Gwynedd including Bangor to rise by 7.8% over the last year, according to reports from North Wales Chronicle. In terms of rental demand, much of the demand for buy-to-lets comes mainly from the local market and the student market. The average rent in Bangor is currently £1,237 per month, as stated by Home.co.uk’s Bangor Market Rent Summary. It also understands that landlords in Bangor can earn £542 PCM from a one-bed property, £790 PCM from a two-bed property and £1,023 from a three-bed property.

Wrexham (LL11)

Wrexham is unmistakably the biggest town in North Wales by some way and it looks to show no sign of slowing. The population in Wrexham is expected to grow to around 150,000 by the late 2030's which means that demand for homes is only going to rise. Similarly to Bangor, Wrexham is a university town, with Wrexham University hosting around 6,700 students as well as Bangor University posting a small campus in the town.

Home to industries like high tech manufacturing, biotech, and financial and professional services, Wrexham is quickly becoming the economic capital of North Wales. Wrexham Industrial Estate is one of the largest business parks not just in the UK, but across the whole of Europe with a number of big employers based within the town. This has created a busy jobs market and real demand for buy-to-let accommodation. The average house price in Wrexham is currently £157,208 which places the developing town as one of the most affordable locations to invest in North Wales. With the demand for housing on the rise along with some of the lowest average property prices across North Wales property investors from all around the world are starting to unearth unmissable opportunities. Especially investors who have looked across the border in England to fellow compatriot Chester, where the average property price is a resounding £267,254, according to Zoopla.

Caernarfon (LL55)

Caernarfon is the ancient royal town of North Wales based in Gwynedd with a small population of just 9,800. While Caernarfon is most typically a residential town, it’s important to note that the town and surrounding local area is very popular amongst tourists. With its particularly iconic position gazing out over the Menai Strait all the way to the island ofAnglesey (Ynys Môn). But most famously of all, at the top of the itinerary for most new tourists will be the medieval fortress, Caernarfon Castle. There is also much more to Caernarfon that meets the eye than just tourism and history, as it is also the main employment and service centre for this region of North Wales. Comprising of great local amenities including several supermarkets, specialist independent shops, and also restaurants and bars. Both the main offices of Cyngor Gwynedd and Gwynedd Council are also situated in Caernarfon.

The location of Caernarfon is ideal for reaching other parts of North Wales, with the town sitting within easy reach of Bangor, Holyhead onAnglesey, Pyllheli and the Lleyn Peninsula, Porthmadog and Snowdonia. This is why Caernarfon becomes a popular destination for tourists during the holiday season because of the easy access to Snowdonia National Park. For this reason, many investors scope their attention towards Caernarfon holiday property investments.

The current average asking price for property in Caernarfonis £176,369, according to Zoopla figures. While Rightmove figures also show that property investors can buy property in this town for as little as £33,000, however, prices may vary between each surrounding area. As mentioned earlier, the good news for investors is that property prices have risen across Gwyneddby 7.8% over the last year so the potential for strong capital gains appears to be very promising! Meanwhile, in terms of rental demand, this mainly comes from locals and the holiday property rental market in the area. HomeLet’s Caernarfon Market Rent Summary says that the average rent in this town is currently £585PCM. This means that yields are relatively steady around the Llandudno LL54 and LL55 postcodes ranging between 5.1% and 5.2%. However, holiday lets create the opportunity to earn much higher rents and with it, even greater yields for property investors. A quick search with holiday accommodation rental site Cottages.com tells us that a holiday property in Caernarfon can earn anything in the region of £475 per week to £1,905 per week during the peak summer season.

Why invest in North Wales?

Staying with Caernarfon, property investors in this area have been reaping the benefits of the Caernarfon Waterfront Regeneration scheme. This has seen to around £15 million invested into regeneration in recent years with more scheduled to take place. The latest Cei Llechi development provides 19 workspaces for local artisan/craft manufacturers and holiday lets. The fantastic outcome of this regeneration is not only a boost of tourists and visitors but also a huge boost to the local economy. Another development which has been on the mind of experienced property investors is the Caernarfon and Bontwenydd bypass which is set to open in 2022. This is because the new road should make it easier to travel around Caernarfon and potentially open up new areas for development.

Meanwhile on a broader scale, more than £100 million is currently being invested into making North Wales an even more popular destination for tourists. The best news for property investors is that there are further plans to boost the economy in this region. As we have learnt from Liverpool’s staggering regeneration in recent years, these plans only stand to benefit the North Wales property market! The North Wales Economic Ambition Board has joined the Welsh and UK Governments to sign a deal that could see £1 billion pumped into North Wales. It is expected that over 5,000 jobs could be created from the potential investments within the Growth Deal across Technology & Innovation Hubs, Sites & Premises for business, Digital connectivity, Skills, Transport and Business support.

When asked about the vast public and private investment in North Wales, Secretary of State for Wales Alun Cairns said: “The North Wales Growth Deal is a huge and exciting opportunity to transform the region and help rebalance the Welsh economy. We will continue to work with our partners to develop the growth deal and ensure it is delivered for the people and businesses of North Wales.”

This lucrative benefits of this development seemingly surpasses the borders of North Wales, according to the Minister for the Northern Powerhouse and Local Growth, Rt. Hon. Jake Berry MP explaining: “This agreement will deliver multi-million pound investment with the potential to create green collar jobs in the nuclear and low carbon sectors, as well as boosting tourism and businesses across North Wales, the Northern Powerhouse and beyond.”