Every quarter, we at propertyhotspots.net take a look at what’s up and what’s down in the property market. Where are the places to buy where you can expect good capital growth in the long-term, and good rental income in the short to medium term? And every quarter, the research throws up some surprises. This time is no exception. Three out of the top five UK towns and cities I recommend to my investors are  in Scotland.  And no, they were not Glasgow, Aberdeen or Edinburgh but Largs, Kilbirnie and Banff.

If you’ve never heard of these places then get educated!  Have a look at my summarised top 5 list for the first quarter of 2006. Don’t worry about “Yield” for the moment – all will become clear in a second.

To my surprise the No 1 spot went to a place in England, Barrow-in-Furness in Cumbria.  Now before you start heading up the M1 to buy everything in sight I will let you know it’s a very small place.  I was only able to source two properties in this area in a very dodgy street.  Properties in the rest of the area are sensibly priced so investment opportunities are few and far between.

Second, third and fourth positions were not to my surprise.  I have sourced and bought over 200 properties in this area and surrounding for me and my clients.  Starting prices and yields are very attractive and the great thing is that there are loads of properties to buy!  If you now find yourself compelled to go to the Ryanair or Easyjet sites looking for cheap flights to Scotland then all I can say is, “you’re heading in the right direction”.

I get asked all the time “So why Scotland?”  and I always have a one word answer for them – “Yield!”.  Yield is:

Scotland offers consistently higher yields than anywhere else in the UK.  Trust me, I’ve done the research of over 400 towns and cities in the UK. 

Even though Barrow-in-Furness can offer you a higher yield you’ll simply struggle to find the deals.  You’ll probably lose out to a local landlord in Barrow or to someone like me whose living is derived from finding such deals.

Another surprise entry was our number 5 spot Thamesmead which is actually in a London borough.  Like Barrow-in-Furness, the opportunities are limited.  You will be restricted to the concrete tower blocks which I recommend to my investors to largely stay away from due to the high service charges.

So you have found the place and you may even have sized up a property.

What do you do next?

Well, make sure you’ve got enough for a deposit!  You usually need a 15% deposit but there are couple of lenders that require less than this.  (Incidentally, I reckon in 2006 we will see the introduction of the 10% deposit Buy To Let mortgage.) But even if you haven’t got the deposit sitting in the bank then no worries!  I started my £10m portfolio with only £500.  All you have to do is raise the deposit.  The way to do this, with the cheapest first is:

So I’ve told you:

1. where to invest and
2. how to raise a deposit out of nothing.

These are the two most difficult things a property investor faces and I’ve just told you where and how. There should be no stopping you now amassing a small property fortune like me.

Ajay Ahuja is the founder and owner of propertyhotspots.net, a website giving information the most profitable places to invest in the UK which is updated daily.

Other Useful Information
Top Tips for Profitable Property
The Buy-to-Let Bible - Ajay Ahuja
The Seven Pillars of Buy-to-Let Wisdom - Ajay Ahuja
Buying Bargains at Property Auctions