Derby Property Market in 2024
While the challenges of the last few of years impacted southern property markets, regional cores across the Midlands have thrived. In the search for more space and affordability, tenants have flocked to core cities across regions such as the East Midlands – more specifically properties in Derby.
This led to a 60% increase in sales in 2020, 17% of which were from London leavers looking for affordability. This trend is set to continue, with JLL predicting that the East Midlands will see a 2% increase in property prices in 2024, double the wider UK forecast of 1%.
Although this is relatively slow growth compared to previous performance, It is strongly advised get ahead of the market and invest at current prices, as the region’s property market is set to see more significant price boosts in years to come. JLL anticipates that 2025 will see a 5.5% price increase, and a further 5% price increase for 2026.
With 64% of Derby workers living in the city and 21.2% of the local population aged between 19 and 35 – both major demographics within the rental market – our Derby property price forecast remains positive. Now, as the Derby Masterplan continues to build new amenities and expand on the city’s exceptional connectivity, the potential of Derby property investment continues to rise.
Derby Property Prices in 2024
Derby property prices have already seen an increase of 57% over the last ten years after nearly £3 billion worth of inward investment into the city, with Halifax stating that property prices jumped by +15.8% to £277,491 between 2021 and 2022 alone.
From 2022 to 2023, house prices have grown by 4% – an exceptional feat considering the pervasive mortgage crisis, inflation and rising base rates. In fact, Derby is one of the rare cases where house price growth is outpacing inflation.
It is blatant that the Derby property market is exceptionally resilient: it’s no wonder Derby has been coined the 6th best UK property hotspot to have on your investment radar by Property Market Index.
A further £3.5 billion worth of investment in the form of the Derby City Centre Masterplan is expected to help drive prices to new heights. Our Derby property price forecast suggests that Derby prices could see a real-value increase of £25,426 by 2025 based on a predicted 11% increase from current prices of £231,150.
Derby Rental Prices in 2024
With the Derby property price forecast suggesting that prices will rise over the next three years, it’s no surprise that Derby rental prices are also forecast to increase.
Derby’s average rent is currently £870 according to Home, a jump from £825 in 2022, with rental yields reaching as high 8.59% in 2023 according to an amalgamation of sources.
A recent BBC article unveiled that 7,000 residents in Derby are eagerly waiting for a council home in Derby, demonstrating that appetite for rental units is exceptionally high across the city. When we also take into account the rise of ‘generation rent’ and Derby’s young population, the demand and value of rental property is only expected to rise in the next five years.
Derby Supply and Demand
Striking the right combination of supply and demand is vital for maximising the returns on a Buy-to-Let property, which is why finding a location with an undersupply of property and growing demand can result in a lucrative investment.
The supply of property across Derby has been lagging behind demand for years, with the city’s future growth set to only fuel this further and continue pushing house prices in Derby. The city’s population is currently surpassing 267,000 and is expected to increase by 5.3% over the next 20 years, highlighting the potential of investment opportunities in the area.
Properties for rent in Derby have always been – and always will be – a staple within the market, due to the city’s young population. Almost 50% of Derby’s population is under 35, and with a strong student population of over 30,000, the city has a strong foundation of residents within ‘generation rent’, looking for properties to rent in Derby.
The demand for property is already far surpassing the supply across Derby, but with the population set to increase considerably over the next two decades, this undersupply will continue to escalate.
Both house prices in Derby and average rents will likely reflect this growth in the coming years, driving a positive Derby property market forecast and cementing the city as a prime investment opportunity.
Want to know more about the Derby property market for 2024? Download the Derby Investment Guide today and discover everything you need to know about Derby property investment in the new year. In this guide you’ll find:
- Current market performance
- Forecasts for the Derby property market
- Key trends impacting the market
- Why Derby is a key investment hotspot
Derby Past Performance
House prices in Derby have been on an upward trajectory for many years, but the city still remains one of the most affordable in the UK to buy properties in. Over the past 20 years, Derby’s terraced houses have seen price growth surpassing 150% according to Home.co.uk, with semi-detached homes performing similarly well with 112% growth.
Rental yields in Derby are similarly impressive, with research indicating that it takes an average of just 21 months for an 8.59% rental yield to recoup the initial property investment you put down. Derby’s competitive rental yields highlight the demand for properties for rent in Derby and make the city an ideal property investment location.
Not only do investors have the opportunity to enter a market with more affordable prices, but the growing demand for properties to rent in Derby will maximise returns over the long-term.
Key Projects Driving Growth in Derby
The future of Derby is set to be just as – or even more – impressive than its vibrant past. In recent years, the local community and the UK government have recognised the potential of the city, with many regeneration schemes now in progress and on the horizon, all of which are fuelling property forecasts and pushing up house prices in Derby.
The Derby City Centre Masterplan is at the centre of the city’s regeneration, and will work towards solidifying Derby’s position as a hub of innovation. With plans to rejuvenate amenities and introduce new workspaces across Derby, the city will benefit from additional jobs and homes, as well as additional inward investment.
Specifically, the most notable developments within this scheme include the regeneration of Becketwell Performance and the Assembly Rooms, along with the development of a £20 million hi-tech business park. The combination of projects within the masterplan aim to meet the demands of an evolving population and offer a city to live, work and play in.
Not only is the regeneration of Becketwell Performance set to generate 2,000 jobs alone, but more than 4,000 jobs and 1,900 new homes are expected to emerge from the entire masterplan, which has a forecasted completion of 2030. In delivering new jobs and upgraded amenities, the demand for rental properties could continue soaring and house prices in Derby could also undergo natural capital growth.
The Derby City Centre Masterplan has catalysed many key developments across Derby, the regeneration of Nightingale Quarter being one of these. To meet the city’s growing demand for properties to rent in Derby, this £150 million regeneration scheme will deliver around 800 new homes for Derby.
The new Infinity Park regeneration programme is particularly exciting, bringing a new innovation and technology park to the city which is predicted to generate 3,000 jobs and plenty of investment over the coming years. The park will also include drive-thru eateries, pubs, hotels and office spaces.
There are also more recent plans to undertake huge regeneration as part of the University of Derby’s latest masterplan to reinvigorate the city’s educational facilities over the next decade. A new business school is set to open by 2025, and £13 million has been secured for a new East Midlands Institute of Technology. The entire masterplan, including an overhaul of their entire city hub, is set to cost £150 million, making Derby an educational hotspot in the Midlands.
Other significant regeneration projects in Derby include the £35 million project to upgrade Derby Market Hall, which is currently in its final stages, as well as the £17 million regeneration of Derby Silk Mill which is being converted into the Museum Of Making. Each of these projects is designed to celebrate Derby’s history and culture through the preservation of key grade-listed buildings, making the city more attractive to locals and visitors alike.