Why Investors are Focusing on Small Cities and Market Towns

Investors are increasingly turning their focus to small cities and market towns as promising locations for property investment. Once overshadowed by big cities, these areas are now seeing a surge in demand, driven by several key factors that make them a highly attractive option for those looking to maximise returns on property.

1. Rising Rental Demand in Smaller Cities and Towns

Rental demand is increasing in smaller cities and market towns, fuelled by people seeking a quieter, more affordable lifestyle. The COVID-19 pandemic catalysed a shift toward remote work, allowing many professionals to move away from urban centres in favour of areas offering a slower pace of life and lower costs. 

Cities like Halifax, Huddersfield, and even towns within commuting distance of larger hubs (like Manchester and Leeds) have witnessed rising rental occupancy rates, making them ideal for buy-to-let investments. The steady demand for rentals in these areas means more consistent income for investors.

2. Lower Competition, Higher ROI Potential

In contrast to major cities where fierce competition drives property prices up, smaller towns and cities generally have more affordable entry points. Investors can acquire properties at lower prices while still achieving solid rental yields, often outperforming the ROI from similar investments in more competitive markets. 

For example, in West Yorkshire, average property prices remain significantly lower than those in nearby Leeds, meaning investors can secure high-quality properties with less capital. Lower entry costs combined with increasing rental demand often lead to better cash flow, making these areas ideal for both first-time and seasoned investors.

3. Regeneration Initiatives and Economic Growth

Many small cities and towns in the UK are benefiting from government-led regeneration projects and infrastructure improvements, which increase property values. Projects such as the Northern Powerhouse and various local initiatives have injected millions into improving housing, transportation, and amenities in these areas. 

Halifax, for example, has undergone substantial regeneration, including the restoration of the historic Piece Hall, which now draws thousands of visitors each year. This not only elevates the town’s appeal but also raises property values as new businesses and residents are drawn in. For investors, this adds an extra layer of opportunity, as capital appreciation in such regions can be substantial over the long term.

4. Enhanced Quality of Life Driving Demand

Smaller cities and towns offer a high quality of life that appeals to families and retirees, two demographic groups with a steady demand for rental properties. Good schools, lower crime rates, and close-knit communities attract tenants who are likely to stay longer, reducing tenant turnover for property owners.

Additionally, the rural landscapes and recreational amenities often available in these towns create a stable and attractive rental market with less risk of vacancy.

5. The Potential for HMO and BRRR Strategies

Market towns and smaller cities are well-suited for property investment strategies such as Houses in Multiple Occupation (HMO) and Buy, Refurbish, Rent, Refinance (BRRR). These properties can be acquired at lower prices, allowing investors to maximise their return by adding value through renovations or conversions. 

HMO properties, in particular, work well in areas with high rental demand, offering investors an opportunity for higher yields than single-let properties. The lower acquisition and renovation costs in these areas allow investors to complete a BRRR cycle with relatively less capital, enhancing returns and building equity faster.

Why Invest in Small Cities and Market Towns with PropInvest Co.

As the appeal of smaller cities and towns grows, so do the opportunities for investors seeking stable and profitable ventures. At PropInvest Co., our expertise and local market knowledge make us the perfect partner to guide you through identifying, acquiring, and managing properties in high-growth regions. 

Whether you’re a seasoned investor or new to the market, our hands-off service will help you maximise your investment with minimal stress. 

Get in touch today to learn how we can help you leverage these opportunities.