Investing in Burnley: Balancing High Returns with Socio economic Challenges

Good morning.

I’ve had to control my emotions when looking at properties especially in the last year or two. I see a relative cheaper property and I think, ‘Great’, i’m in!

But i’ve learnt from my experience, not every ‘cheap’ property is the right investment. It makes you scrutinize the data a little bit more to uncover the whole truth.

Sure, low prices make it easy to buy—but as any smart investor knows, there are two variables that you want in your favour to make money in property: rental yield and capital appreciation.

That’s the game.

Now I know we been looking at Leeds as an area that is thriving and showing really good growth prospect. But I want to balance the argument a little.

So today, I want to walk you through an area that might seem like a quick win—affordable, high rental returns, easy entry. But when you dig deeper into the data, some red flags start to appear.

Let’s break it down. 🚀

Buy-To-Let Mortgage Rates

OTHER NEWS

1. UK Property Market Sees Positive Start in 2025 with Rate Cuts. The UK property market is gaining momentum with rising sales and price growth

2. British Land Partners with Abu Dhabi Investor for Major City of London Office Scheme. British Land has entered a partnership with Modon, an Abu Dhabi-based holding company

3. LondonMetric Property Strategic Portfolio Adjustment. LondonMetric Property sold 34 assets for £155 million in the first half of the fiscal year
   

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Investing in Burnley: Balancing High Returns with Socio economic Challenges

Economic Indicators

The town's economy is showing positive signs of growth and diversification:

1. Employment: As of December 2023, the employment rate for those aged 16-64 in Burnley was 76.0%, higher than the North West average of 73.8%7. This represents a significant increase from 71.3% in the previous year.

1. Workforce: Burnley's total workforce stands at 32,924, with a notable 17.9% growth in employment. This growth suggests a robust job market and potential increased demand for housing.

2. Business Activity: In 2024, Burnley had 2,645 active enterprises, with the majority (2,295) being small businesses with fewer than ten employees. This diverse business landscape contributes to economic stability.

3. Sectors: The largest employment sectors include advanced manufacturing (12,900 workers), wholesale and retail (12,000 workers), and health and social work (10,000 workers). This diverse economic base provides multiple streams of potential tenants.

30% of the population is DE social grade, that worries me.

As an investor you want to see more positive social environment and want to see a city that is prospering and growing.

Property Market Metrics

Burnley stands out in terms of rental yields and affordability:

Very positive and in isolation very attractive. Is very appealing for someone new to investing and wants to get their foot on the ladder.

Demographics and Housing

1. Age Distribution: 20.9% of Burnley's population is under 16 years old, while 17.2% is aged 65 and over. This balanced age profile suggests a mix of family homes and properties suitable for older residents could be in demand.

2. Household Composition: In 2021, 13.1% of households were one-person households aged 66 years and over, while 19.8% were other one-person households. This data indicates a potential market for smaller properties and apartments.

3. Crime Rate: Burnley had an overall crime rate of 131 crimes per 1,000 people. To give you a comparison, UK has an average of 79 crimes per 1,000 people.

Crime rate worries may, that is too high. That alone would make me think twice.

Infrastructure and Development

Burnley has seen significant investment in infrastructure and regeneration:

1. M65 Motorway: This has improved access to the area, leading to the development of new business locations near motorway junctions.

2. Commercial Development: There are numerous available commercial sites in Burnley, including quality office developments in repurposed textile buildings.

3. Industrial Growth: The former Michelin Tyre factory site has been redeveloped and is now occupied by Burnley's largest employer, Safran Nacelles, along with other firms.

Hard working city and clearer contributes to the UK power growth

Transport links

Transport links in and out of London are extensive and well-developed, catering to the needs of millions of commuters daily. Here's an overview for both train and car commuters:

BOTTOM LINE

✅ Pros:

• 📈 High rental yields, offering strong potential for rental income

• 💰 Affordable property prices (average £76,300), lowering entry barriers

• 📊 Improving employment rate, indicating potential economic growth

⚠️ Cons:

• 📉 High deprivation levels and social inequalities, which may limit long-term property value growth

• 🚨 Above-average crime rates, potentially affecting property desirability

Overall, Burnley could be a good fit for investors focused on high rental yields—but it comes with challenges that can’t be ignored.

With high deprivation levels and above-average crime rates, the risks are real.

While rental income may be strong, capital appreciation is likely to be slow, especially when compared to other UK areas offering better long-term growth potential.

I would want my money to be working hard and smart and rather see both rental yield and capital appreciation in my favour and on the rise.

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