High Yields, Happy Tenants: Your Guide to Profitable Southampton Buy-to-Let

Discover whether you should secure a profitable Southampton buy-to-let. Located in Hampshire, the renowned port city of Southampton is rich in heritage and offers a vibrant array of activities. 

It stands out as one of the greenest cities in the UK. With a profound maritime history, top-notch universities, two hospitals, thriving arts venues, and a bustling port, Southampton is an ideal destination for students, young professionals, families, and cruise enthusiasts.

Why Invest in Profitable Southampton Buy-to-Let Opportunities?

Home to the UK’s leading cruise port, Southampton welcomes an impressive average of two million cruise passengers, contributing a whopping £2.5 billion to the UK economy through its maritime sector.

With a thriving academic community, Southampton hosts 46,000 students across its two prominent universities. The University of Southampton, a founding member of the esteemed Russell Group, and Solent University, known for its specialisation in business, marine studies, and the creative sector, bring a wealth of new expertise to the city.

Southampton’s economic landscape is improved by several well-known financial service providers. From Starling Bank to Benefax, these businesses contribute a number of job opportunities to the local community. 

Adding to the bustle of the city, the iconic Westquay shopping centre offers a vibrant hub of shops, restaurants, and leisure activities. 

Regeneration Projects in Southampton

Southampton continues to develop and transform as a world-class city, whilst the city council works on its master plan. 

Some key initiatives will bring increased homes and workspaces, enhance the environment, connect with the waterfront, and encourage further growth and investment in the city. 

The following projects offer a variety of profitable buy-to-let opportunities in Southampton.

Bargate Quarter

What was once a former shopping centre will be transformed into a vibrant quarter celebrating some of Southampton’s richest historical assets. At almost £100 million, the investment will deliver 500 new build-to-rent apartments, including townhouses. Bargate Quarter aims to look to the future by respecting the past.

By looking to the future and respecting the past, this project enhances the urban landscape but also offers a promising investment in the city’s future growth. 

Centenary Quay

As part of the city’s aim to invest in housing, workspaces and connecting people to the water, Centenary Quay represents a £500m investment providing 1620 new homes and 14,000 sqm of commercial space. 

The former shipyard has a history dating back to 1876. It has transformed into an exciting waterside community. This development offers affordable homes and services but pays homage to the site’s shipbuilding past by providing maritime commercial space.

Maritime Gateway

At the former site of international toy retailer Toys R Us, the Maritime Gateway project aims to link Central Station to the city’s famous waterfront. 

This £200m investment will improve biodiversity through a landscape-led approach, bringing 600 new homes and 60,000 sqft Grade A office space.

Things to Do in Southampton

Visitors to Southampton won’t be short of attractions to visit and destinations to explore. Here are just a few of the hotspots that top any Southampton to-visit list: 

• Visit the SeaCity Museum: learn about Southampton’s maritime history, including the Titanic tragedy.
• Hit the Westquay Shopping Centre: indulge in retail therapy with over 130 shops.
• Visit the Mayflower Theatre: enjoy some theatre or a comedy night.
• Stroll through the Old Town and Bargate: step back in time and explore the charming streets with historic buildings, independent shops, and cosy cafes.
• Take in the green spaces: connect with nature in one of Southampton’s many parks such as Southampton Common, a vast public park offering green space, ponds, and walking trails.

Transport and Accessibility

Renowned for accessibility, Southampton offers a range of transport options from sea, air, road, rail, and local transport.

• By Sea: the port of Southampton efficiently manages 900,000 vehicles and welcomes 2 million cruise passengers. Additionally, the Red Funnel ferry service transports 1 million cars and 3 million passengers to and from the Isle of Wight yearly.
• By Air: flying around 2 million passengers a year, Southampton International Airport serves the community of Southampton.
• By Road: with the M27 running east/west from the New Forest to Portsmouth and the M3 travelling northeast directly to London, Southampton is well connected to the rest of the UK.
• By Rail: connecting passengers from Southampton to London in just 1hr 15 mins. Southampton Central Station is the main station for the community.
• Local Options: to improve local transport, the council is trialling e-scooter hire across the city and conducting feasibility studies into water taxis, connecting waterfront communities and venues, and a mass transit system.

Property Market Overview

Southampton is a popular choice for property seekers, thanks to its maritime history, student population, transport connections, and economic stability. If you are considering a profitable Southampton buy-to-let investment, you will be interested to know that the average price for a detached house in December 2023 was £310,447 according to Home’s House Price Report.

For those looking for a safe and secure buy-to-let investment, Southampton could prove the right choice for you with 1796 properties currently for sale.

Rental Yield

There is high demand for rental properties in Southampton due to a 45% reduction since 2020. This presents a profitable opportunity for buy-to-let investors due to increased rental prices.

According to Home, the average rent for a two-bedroom house is £1,444 pcm and £2,079 pcm for a five-bedroom house. This is a 29% rise since 2020. Due to the nature of the current property market in Southampton, rental prices will likely continue to push higher with an ongoing demand for rental properties.

As an investor, it is important to conduct thorough market research before making any investment decisions as the market can be influenced by various factors.

The Best Areas to Invest in a Profitable Southampton Buy to Let

Ocean Village

Nestled in the heart of Southampton, Ocean Village is home to 12,000 residents. The average house price is around £237,103, presenting an enticing investment opportunity. Known for its modern living and scenic waterfront views, Ocean Village has become a sought-after hub for residents.

The Maritime Quarter within Ocean Village offers a diverse range of properties, from luxurious penthouses to more affordable homes. This area is increasingly popular among tenants looking for the perfect mix of city living and maritime charm.

Ocean Village has an average rental yield of approximately 5.7%, making it a profitable choice for those looking to capitalise on buy-to-let investments in Southampton.

Bassett

The suburb of Bassett, found in the heart of Southampton has a varying population of families, professionals, and students. The average house price in Basset is around £343,472.

Bassett is a good investment opportunity for those looking to be near educational institutions such as the University of Southampton. The large student population creates a high demand for rental properties in this area, making it a valuable investment opportunity.

Investors in Bassett can anticipate an average rental yield of 4%. Bassett provides a steady investment opportunity.

Portswood, Highfield, and St. Denys

Portswood, Highfield, and St. Denys are targeted by students for their proximity to the University of Southampton. This makes it an ideal location for buy-to-let investments targeting the student market.

The average house prices in Portswood and surrounding areas are around £273,617. The steady demand for student properties makes Highfield an ideal choice for landlords looking to invest in student accommodations.

Whether you are looking to invest in buy-to-let properties for students or more traditional homes, these suburbs have a range of investment opportunities for your tenant preference with an average rental yield of 6%.

Bitterne

This suburb provides a range of housing options, including family homes. Bitterne has good local amenities and transport links.

Offering a range of housing options, Bitterne stands as an enticing prospect for property investment. With its diverse community and average house prices around £268,849.

The family-friendly charm of Bitterne makes it a strategic location for both residents and investors. Close to high-performing schools, parks, and shopping centres, this location appeals to both families and young professionals. The average investment yield stands at around 4%.

Shirley

A well-established residential area to the northwest of the city centre, Shirley is made up of private and social housing, making the average house price around £267,934. The Southampton General Hospital is also located here.

It has a good selection of schools and is located near major transportation routes, making it ideal for families. This has the potential to offer long-term tenants. The rental yield sits at around 4%.

Ready to Invest in a Profitable Southampton Buy-to-Let?

Making an investment in buy-to-let properties in Southampton in 2024 is likely to yield high returns due to the city’s strong demand for rental properties. The continued demand, coupled with high rental yields, is sure to attract property investors to the area.

Furthermore, the ongoing regeneration projects within the city make it an exciting time to invest. As more affordable housing is built and travel infrastructure continues to develop, the increased accessibility and improved living conditions contribute to the overall appeal.

If you’re in search of buy-to-let insurance, your search ends here. Compare quotes with CIA Landlords today to secure the best and most affordable deal for your investment.