Why you should be investing in Cardiff’s (Caerdydd’s) buy-to-let market

The capital of Wales and the eleventh largest city in the UK, Cardiff has always been a popular location for buy-to-let properties and its recent developments have only bolstered the appeal of the city to investors. Home to one of the largest shopping centres in the UK, thriving universities, and hundreds of independent cafes and bars, Cardiff is an incredible city.

So, it’s no surprise that the rental market is at its most buoyant. The average price for a property in Cardiff was £283,116 over the last year, an increase of 11% on the previous year and a further 19% increase on the 2019 price peak of £238,783. Similarly, the average rent in the city currently sits at £1,279 per month far surpassing the average for Wales. Flats make up for nearly half (45.6%) of all rentals in the capital, but the pandemic’s impact of property must-haves has seen the demand for detached properties on the rental market increase by over 30%.

What can be expected from the rental market?

With a city population of approximately 470,000, official figures say Cardiff will grow by 20% by 2035. Since 2010/11, we have seen a 137% increase in purpose-built student accommodation (PBSA) demand thanks to the thousands of students and over 8,500 international students coming to the capital looking for high-quality accommodation. As the UK’s fastest-growing student property city, rent growth is 233% higher than the national average, yet there are approximately 2.5 students for every PBSA property in the city, leaving a wealth of demand still to be met.

Along with a high demand for student living, 62% of tenants are aged between 18 and 29, presenting a generous interest from young professionals who work in and around the city. Not to mention, the Bay is the largest waterfront redevelopment in Europe featuring 2,700 acres of derelict land transformed into a cosmopolitan continuing to drive desirability to live and work. Couple this with the construction of St. Mellon’s railway creating links to Bristol, London, Birmingham, and South Wales, we’re expecting to see a continuous upward trajectory of tenants in Cardiff.

Similarly, the variety of fantastic schools in and around the city has seen the requirement for family lets remain strong during the pandemic.

So, what are the figures?

Market predictions anticipate an increase in rent of up to 9.5% to 2025 in Wales, while Cardiff’s average rental yield is around 6 – 7% with some postcodes being considerably higher. CF24 in particular was ranked by The Times as one of the best rental markets in Britain with a 7.9% yield and CF43 (7.61%) following closely behind.
With a lack of supply on the market, four and five-bedroom homes bring a rent of £1,378 pcm and £1,857 pcm respectively, while two-bedroom properties have the highest availability on the market with a generous average rent of £1,078 pcm.

Should you start investing in Cardiff?

There is undoubtedly a huge demand for high-quality HMO’s and blocks of flats in Cardiff, both for investors to purchase or tenants to let and as the number of student and professional residents increases, investing in Cardiff in 2022 is a fantastic decision for investors and landlords to benefit from the trending capital.

As Cardiff’s letting agent of the year 2021/22 with a team that boasts extensive experience and impressive networks, we are uniquely structured to provide a robust management service while maximising rents for our clients. We can competently handle off-market sales and provide you with a bespoke service for your property requirements proven by our 4.9/5 Google rating, making us the best local estate agents in Cardiff.

If you’d like us to review your portfolio to discover how we can maximise your annual yield, contact our friendly team today on 029 2013 0000 or at hello@nexacardiff.com.

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