Derby Property Market in 2023-24
While the challenges of the last two 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 for rent in Derby.
This led to a 60% increase in sales over the last 12 months, 17% of which were from London leavers looking for affordability.
With 64% of Derby workers living in the city and 48% of the local population under-35 – both major demographics within the rental market – our Derby property price forecast grows even more 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 2023-24
Forecasts suggest that Derby property prices will rise by 17.5% by 2026.
Derby property prices have already seen an increase of 54% over the last ten years after nearly £3 billion worth of inwards investment into the city, with Halifax stating that property prices have jumped by +15.8% to £277,491 between 2021 and 2022 alone.
Likewise, Derby apartments saw 4.1% growth over the last year, around £4,100.
A further £3.5 billion worth of investment is expected to help drive prices to new heights and our 2023 Derby property price forecast suggests that Derby prices could see a real-value increase of £32,500 by 2026 if expert predictions come to fruition.
Derby Rental Prices in 2023-24
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 £901 according to Home, a significant jump from £825 in 2022, with rental yields reaching as high 8.59% in 2023 according to an amalgamation of sources.
With a population set to increase by 20% over the next 15 years and only 17,000 rental properties in the market, the need for residential accommodation in Derby continues to grow.
Forecasts suggest that this increased demand will mean rental prices rising by 12% over the next four years.
When we also take into account the rise of ‘generation rent’ and Derby’s relatively 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 of a Buy-to-Let property, which is why finding a location with an undersupply of property and growing demand can result in a potentially 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, yet there are only 17,800 rental properties available in total, 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 reach 312,000 by 2037, this undersupply could continue to escalate. Both house prices in Derby and average rents will likely reflect this growth in the coming years, driving the positive Derby property forecast and cementing the city as a prime investment opportunity.
Want to know more about the Derby property market for 2023-24? 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 in 2023
- 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, house prices in Derby have increased by 200%, equating to £120,719, and in the last 10 years alone, it has seen almost £62,159 growth.
With rental yields for one bedroom properties in Derby reaching 8.59%, the city is surpassing the majority of areas across the country and far exceeds the UK average rental yield of 4.71%. While the city is lagging behind with property prices, Derby’s competitive rental yields highlights 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 the market with more affordable prices, but the growing demand for properties to rent in Derby could 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 has recognised the potential of the city, with many regeneration schemes now on the horizon, all of which are fuelling property forecasts and pushing 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.
Occupying the former Derbyshire Royal Infirmary site, the project covers 18 acres and will deliver advanced fitness areas, new cycle routes and green spaces for residents to enjoy. However, the site will continue to pay homage to the Derbyshire Royal Infirmary, with the iconic pepper pots set to be transformed into exhibition space, meeting rooms, a gym and a cafe.
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.