Finding the best property investment in Europe

Buying in a property ‘hotspot’ will considerably improve the success of your overseas investment. However, finding a hotspot in an area you don’t know well can be challenging and so it’s best to ask the experts. International property specialist and founder of Hurst & Wills, Lisa Bathurst, gives some tips on how to spot a hotspot and some European cities to consider right now.

“We all want value for money, so a good tip is to look at previously undesirable areas that have shown price increases over the last three years. This is a good indication that the area is up and coming and you’ll get a better deal buying there,” says Bathurst.

“Property across Porto in Portugal saw a 15.2% price rise in the last year and the rise looks set to continue. This city still offers affordability and that wonderful, traditional Portuguese charm,” she says.

CBRE & JLL has identified Portugal as one of the best property investment markets and the Algarve is another hotspot,” says Bathurst. “A wave of younger, wealthy people looking to the Algarve for sophisticated living, lifestyle and outdoor sports, have contributed to a 9.2% property price increase last year. It has become a chic second-home destination, as well as home to more than 100,000 resident expats,” she says.

“Looking at the increase in estate agents in an area is also a good indication of things to come. Agents have specialised tools and strategies for identifying where to have new branches. This has been the case in the Algarve, with new agencies opening branches and adding areas outside of the main cities to their portfolio,” she says.

“A growing population – especially when younger people, in their twenties and thirties, are moving in – will inevitably lead to house-price growth in a relatively short space of time,” says Bathurst. “Lots of young professionals involved in tech start-ups are moving to Lisbon, and there are government initiatives to attract business to the city. These young professionals also require proximity to local retailers and transport links, encouraging more local business owners to the area,” she says.

Last year Berlin’s housing market was the fastest price growth market in the world and the city continues to enjoy double digit growth year-on-year. “Property prices rose by 15% in 2018, yet they’re still about a third of the price of property in London,” says Bathurst. “Berlin has high occupancy rates of around 98% and a strong population growth of more than 50,000 people moving to the city annually, supporting the ongoing demand for housing,” she says.

“Large-scale Infrastructure growth and transport projects also mean higher house prices,” she says. “They often bring employment to the area, meaning more families and potential tenants. Manchester has a projected growth of up to 26% over the next few years. There has been significant infrastructure growth and a number of big businesses have relocated their offices there. It has the highest rental yields in the United Kingdom and still has a substantial undersupply in both the sales and rental market,” says Bathurst.

“Birmingham has had the largest property price increase in the UK over the last year, with the average property price rising by a phenomenal 16%,” says Bathurst. It also has an impressive 49% student retention rate. The 2022 Commonwealth games has brought considerable investment and infrastructure to the city, and big corporate giants like Deutsche Bank, PwC & HMRC have already relocated to Birmingham.

“Adding to that, the much-anticipated high-speed train, HS2, now under construction will cut travel time from Manchester to London to just one hour, essentially making cities like Birmingham and Manchester commuter cities for London,” she says.

“London property prices have been declining, while the number of residents moving to more affordable markets on the commuter belt is increasing,” says Bathurst. “Figures show that house prices a 40-minute commute away from Central London are nearly half the price. This makes commuter towns like Bracknell, Basingstoke, Luton and Slough attractive as they offer much lower property prices, without compromising on direct access to the capital,” she says.

Bathurst travels regularly to personally check on developers and developments they work with, ensuring everything is up to standard. “Feet, eyes and ears on the ground are the best way to make sure you are selling good investments. If you can’t do it yourself an independent property consultancy, like Hurst & Wills, that works for the client – not a developer – is the best bet.”