Southampton has been revealed as one of the most popular investment hotspots in recent years, here are some of the insights for buy-to-let investors.

The following is an extract from Freshinvest:

Economy

Major employers include The University of Southampton, Southampton Airport, BBC South, The NHS and Southampton Solent University.

The development of a new retail park named WestQuay Watermark, which will sit alongside the original WestQuay retail park is expected to create a further 1,550 by the end of 2016.

Redevelopment is central to Southampton city’s policies with major projects proposed including the city’s first 3 23-storey skyscrapers based on the waterfront.

Southampton’s contribution to the economy has doubled since 1995, now standing at £4.2bn, based mostly on the service sector and industry from the city.

Property Values

The largest percentage of sales in Southampton have come from flats, with an average sold price of £149,000. Terraced properties come second selling at an average of £182,000 with semi-detached properties third within an average of £213,000.

The overall average sold price in Southampton stands at £197,200 and prices in Southampton increased by 6% from last year and were 7% up from prices in 2010.

According to a study by Rightmove and experts at Oxford Economics, Southampton will see the highest property growth in the next 5 years at 43%. This is based on its propensity to London and its closeness to the sea. These figures were calculated using independent consultancy from Oxford Economics. Rightmove believes that the “spillover” from London will have an increased effect on seas side commuter towns with Brighton also on the list.

Rental Demand

A report by the telegraph recently highlighted Southampton as having some of the highest yields in the UK.

An average yield was reported of 8.78%, up from 7.8% last year and probably topped up by student lets.

The city’s landlords benefit from relatively inexpensive house prices as well as strong rental demand driven by its position on the coast for seasonal workers and holidaymakers, together with students attending the city’s university.

Universities

Southampton contains 2 major Universities, The University of Southampton and Southampton Solent University. Together they have a student population of over 40,000 people.

The University of Southampton received its Royal Charter as a university in 1952 after being originally founded in 1862. It has a population of 22,000 students and was ranked in the top 100 research universities in the world in the Academic Ranking of World Universities in 2010. The University considers itself one of the top 5 research universities in the UK, it has a global reputation for research into engineering sciences, oceanography, chemistry and cancer science amongst others.

Southampton Solent University has 17,000 students and its strengths are mainly in maritime functions, training, design and consultancy.

In 2014 Southampton City Council Planning panel approved proposals for a new £30m teaching building with conference facilities which is due for completion in 2015. This is the first phase of a planned transformation of the whole of the east park terrace campus and will eventually include a new sports and sports science complex, a landscaped plaza and enhanced facilities for students, staff and visitors.

Summary

• In Top 10 of Buy to Let Hotspots

• Relatively Low House Prices

• High Rental Demand

• 2 Major Universities

• Huge University Accommodation Demand