The Best Buy-To-Let Areas In Preston

In recent years, the UK’s biggest cities – London, Manchester, Birmingham and Liverpool – have attracted the bulk of interest from property investors at home and abroad. With huge rental markets and exceptional returns, it’s no wonder why.

However, there is a growing trend of looking further afield as these traditional big-hitters become increasingly saturated. Savvy investors are now seeking opportunities in smaller cities that haven’t garnered as much attention, especially those witnessing a revival – where decades of under-investment have given way to a surge of regeneration and progress. Where graduates and young professionals are starting to stick around for longer, the job sector is thriving (especially in tech), and tourism is rising.

With this in mind, one of the most promising locations riding this new wave of investor interest, is the historic Lancashire city of Preston.

Over the last few years, we’ve worked on several buy-to-let projects in Preston, helping investors identify and purchase properties in the city.

In this guide, we’ll lean on our experiences and available data to explain everything you need to know about property in Preston, including the five best areas to purchase a buy-to-let and currently available opportunities.

Naturally, Manchester and Liverpool, as the two biggest cities in the North, are seeing the highest levels of investment. And rightly so, given their past performance and future forecasts. But, in this article, we’ll instead make a case for Preston, the former heavyweight of the Industrial Revolution, which is now showing signs of a change in fortunes.

Preston: A City Of Changing Fortunes

Preston was at the centre of Britain’s cotton production in the Industrial Revolution, with more than 40 mills dominating its skyline. The cotton industry, along with a flourishing dockyard, where workers unloaded grain from ships and transported it to other northern cities, gave rise to an explosion in wealth, employment, and population.

Unfortunately, the city’s golden age didn’t last long. After 1950, the cotton industry went into terminal decline, rendering thousands of people unemployed.

In the early 21st century, though, Preston has shown signs of sustained recovery. In 2018, Preston was named by PricewaterhouseCoopers (PwC) as the most improved city in the UK, based on improvements across employment, income, property, transport, environment, work-life balance and inequality.

The recognition was a welcome and well-earned reward for the city’s development over recent years, aided by regeneration projects and community initiatives designed to boost the local economy. Preston City Council believes the city has the “economic potential to sit alongside Manchester and Liverpool as one of the region’s first-class city destinations”.

And now, the city is being discussed as one of the most promising buy-to-let locations in the country.

Preston is also becoming a vibrant commercial hub, with the local economy named the fourth fastest-growing in the UK. In addition to healthcare and local government, large employers now include the region’s four universities (Lancaster University, University of Central Lancashire, Edgehill University, and University of Cumbria) and major corporations, like Rolls-Royce, BAE, and EDF Energy.

Given the diversity of Preston’s economy and some of the high-tech enterprises in the region, wages are likely to rise in the future. This should have a knock-on effect on the property market, so investors who enter the market today could benefit from substantial capital appreciation and rising rents in the future.

For those considering purchasing a buy-to-let in Preston, this is exciting news: the city is serious about capitalising on recent successes and maximising its potential.

Why Is Preston A Good Choice For Property Investors?

Affordability

The main draw of Preston, compared to the UK as a whole, is the affordability of the local property market.

As of November 2024, property prices average £202,299, significantly lower than the national average of £292,000. This holds in comparison to its neighbouring cities, too:

That makes Preston perfect for entry-level investors or those looking for a low-cost, low-risk addition to their property portfolio.

Levelling Up

Preston is at the heart of nearly a dozen regeneration projects, which are boosting the city’s economic progress and making it a more desirable place to live.

In 2019, the city was awarded £20.9 million from the Towns Fund, a £3.6 billion government initiative for towns and cities across the UK.

Preston will use the funds as part of the city’s 15-year City Investment Plan. This major regeneration scheme will run until 2035 and it aims to improve cultural and leisure infrastructure, boost city-centre living, aid health and well-being, and grow the economy by opening a new commercial district.

This is excellent news for any investor. The plans should create new jobs, bring more employers to the area, and, in turn, create more demand for city-centre property – all of which will increase rental prices and benefit the local property market.

Young, Dynamic Population

The University of Central Lancashire (UCLan) is based in Preston. Around 28,000 students are enrolled in the university, according to figures from HESA.

This leads to a young “feel” in the city, with a high population of students and newly-graduated young professionals who have chosen to stick around after their studies. Population statistics show 36% of the city’s population is under 25, well above the national average of 30%.

The key takeaway here? There’s a swell of tenants that fit the ideal demographics for a landlord. And those numbers are topped up every year by a popular, internationally-renowned university.

Regional Growth Forecasts

Thinking more long-term, residential property values in the North West are forecast to grow faster than anywhere else in the country over the next few years.

Manchester and Liverpool, in particular, are huge drivers for the region and, as such, are likely to see the most significant impact on property values. However, as the region’s third-largest city, Preston will be a force too. We expect property investors in the city to benefit from long-term capital gains – especially with the plans the city has in place.

Where Are The Best Buy-To-Let Areas In Preston?

So, which are the best areas to consider when looking for a buy-to-let in Preston?

By using industry data, we’ve identified the three postcodes generating the best returns through profitable rental yields and long-term capital appreciation.

How did we do it?

It’s simple. There are 11 postcode districts in Preston and the surrounding area.

We scored each postcode by its average rental yield and growth in property values over the past five years:

• The postcode with the highest average rental yield receives 11 points. The second-best receives 10 points. And so on.
• The postcode with the highest growth receives 11 points. The second-best receives 10 points. And so on.
• The rental yield score is multiplied by three to give it a stronger weighting (yield should take slight precedence for buy-to-let investors).
• The two scores are added together to calculate a final score, by which the results are ordered.

Here are the results:

1. PR2 – Ashton-On-Ribble, Fulwood and Grange.

PR2 covers a huge section of the city, including Ashton-On-Ribble, Fulwood and Grange.

As a result, it contains a wide variety of properties – from terraced estates to new builds. There are plenty of good schools, shopping facilities, and transport links nearby, making it a consistently popular choice for families and professionals alike. The area is also popular among healthcare professionals, with the Royal Preston Hospital in Fullwood.

Plus, with some of the most affordable prices in the region (averaging just £207,345), it’s no surprise that properties in PR2 can achieve excellent yields (5.6%).

The added bonus, of course, is the area’s long-term capital appreciation of 17%. This is what makes PR2 the best area in Preston for a buy-to-let, currently.

2. PR1 – City Centre

PR1 covers all of Preston’s city centre and stretches out southwards to Howick Cross and Penwortham.

At the heart of the city, PR1 emerges as an attractive hub for buy-to-let investors, boasting an average asking price of just £165,741. This area has seen a modest 7% increase in prices over the last five years, but it’s the rental demand that makes this area an attractive option for investors.

It has the highest average rental yield of any postcode in Preston (5.9%), thanks to a tenant base largely consisting of young professionals. They’re pulled in by the city-centre lifestyle, with easy access to shops, bars, restaurants, and entertainment.

While PR1’s five-year price growth of 7% is smaller, compared to other postcodes in the area, the stable demand and urban location provide some resilience. Plus, we expect prices to improve as regeneration efforts in the city centre take hold, so getting in early could offer profitable long-term returns.

3. PR25 – Leyland

PR25, encompassing the Leyland area, is noted for its family-friendly feel.

With an average property price of £232,252 and a regional-best price growth of 18% over the last five years, PR25 represents a high-growth market.

Given it’s popular with families, the local schools and parks are a draw for long-term tenants. Further, one of Leyland’s major advantages is its strong transport links. It has easy access to the M6 motorway, and Leyland’s train station offers regular services to Preston (just 10 minutes away) and other cities – making it an ideal hub for commuters.

The more laid-back atmosphere and distance from the city are major benefits, too – providing easy access to the countryside.