By Simon Hemelryk

Property hotspot: Cardiff

In the latest of our series profiling the cities that may be great investments for landlords, we focus on the Welsh capital.

With its parks, excellent universities, a major stadium and ongoing redevelopment, an increasing number of people are drawn to the city of Cardiff.

From coal to Central Square

Cardiff was once the largest coal-exporting port in the world. And while the docks and city were less prosperous during much of the 20th century, in recent years Cardiff has started to bloom. Regeneration has seen new jobs created in sectors including finance, bioscience, technology and the media. Cardiff’s population of 364,000 is expected to reach 430,000 by 2030.

Much of Cardiff Bay has been transformed from underused dockland into a smart, waterfront area full of offices and desirable apartments. Mermaid Quay has more than 30 restaurants, bars and cafés, as well as numerous shops. Close by is the National Assembly for Wales, which has supported hundreds of civil servant and political roles.

Central Square is a 1,750,000 square feet city centre development under construction that will house regional centres for the likes of HMRC and the BBC, and is already home to law firm Hugh James, MotoNovo Finance and many major companies. It’s right next to Cardiff Central train station, creating a positive first impression of the city for visitors.

“It’s very easy for our partners and customers to reach us,” adds Nick Proctor, CEO and founder of Amber Energy, which is based at Central Square. “We’ve been able to reduce our car fleet, too.”

Another major development is Capital Quarter, whose tenants include Network Rail and WSP-Parsons Brinckerhoff. Cardiff’s other big employers include Admiral, Legal & General and GE Healthcare.

“Cardiff has more ‘gazelle’ companies – firms that have effectively more than doubled their revenues in four years – than any other UK city,” adds Douglas Haig, the Residential Landlords Association’s vice chair and director for Wales.

The Cardiff Capital Region City Deal will see local and national government invest £1.2bn into the area with the aim of creating up to 25,000 further jobs.

Students in constant supply

The Cardiff area is home to more than 75,000 students, with four major places of learning: Cardiff University, the University of South Wales, Cardiff Metropolitan University and the Royal Welsh College of Music & Drama. These establishments are all close to the city centre and students tend to live in surrounding areas, such as Cathays and Roath.

“Student numbers are evergrowing and landlords are seeing healthy returns, with rents increasing by about 5%, year on year,” says Jon Hooper-Nash, director of local lettings firm Jeffrey Ross.

But landlord Barbara Cunningham, who has six buy-to-let properties around Cardiff, cautions that HMO (house in multiple occupation) numbers in student areas are closely controlled by the council. “It can be difficult to get permission to create a new one, so I’d be inclined to buy an existing HMO,” she says.

Be wary of new apartments aimed at students in the city centre, too, as high rents mean many are unoccupied.

Castles, culture and sport

One of the most striking things about Cardiff is that it has a large medieval castle, right in the middle of the city. The sense of history is further enhanced by the attractive stone buildings of the civic centre and the Victorian arcades that feature numerous independent shops.

Other attractions include the 74,000-capacity Principality Stadium, venue for Welsh rugby internationals, the Millennium Centre, which hosts big theatre shows and operas, and the SSE Swalec cricket ground.

Thanks in part to Welsh Assembly funding of new studios, major films and TV programmes, such as Captain America: The First Avenger, and the BBC’s His Dark Materials have been filmed in Cardiff. Chapter arts centre is a major hub for Welsh culture, with almost 800,000 visitors a year and more than 30 studio spaces.

“There are lots of grassroots community arts projects, too,” says Hana Lewis, a manager at Film Hub Wales, which works to bring film to wider audiences. “For a modestly-sized place, there’s a great deal of creativity here.”

Park life

There is a huge amount of greenery throughout Cardiff. Bute Park, for example, is just moments from city-centre shops but has 130 acres of woodland trails, riverside walks and landscaped gardens.

“We love walking our dog in places such as Cefn Onn park,” says Lewis, who lives in the attractive suburb Llanishen. “There are lots of rare plants. It’s unusual to have so many almost rural-feeling places in a city.”

“You can be in the Brecon Beacons in [around] 30 minutes and by the coast in 20,” adds Michele Hunt, head of fundraising at RSPB, who has lived in and around Cardiff for more than two decades.

Improving transport links

It may sound like a small thing, but the 2018 scrapping of Severn Bridge tolls has saved motorists up to £1,400 a year, made Cardiff more accessible to business travellers and made commuting to places, such as Bristol, more achievable.

“There has definitely been an increase in enquiries from property investors,” says Michael Taylor, director of local firm Lettings2Sales.

Cardiff has several local train stations across the city and the new South Wales Metro will create new train routes and stations in areas such as St Mellons and Cardiff Bay.

Cardiff Airport has direct flights to more than 50 destinations.

Prime areas

A selection of postcodes in Cardiff that show average rental yield, rent and asking price, according to Totally Money’s Buy-To-Let Yield Map 2019/20. They are:

CF10, Cardiff Bay and city centre

Newer, purpose-built apartments, popular with young professionals.

  • Average rent: £825
  • Average asking price: £174,950
  • Average yield: 5.66%

CF24, includes Splott, Cathays and Roath

Largely terraced houses converted into flats and HMOs. Popular with students.

  • Average rent: £695
  • Average asking price: £195,000
  • Average yield: 4.28%

CF11, includes Canton and Grangetown

Affordable but fairly central properties.

  • Average rent: £795
  • Average asking price: £225,000
  • Average yield: 4.24%

CF3, includes St Mellons and Rumney

A range of houses, as well as ex-council properties.

  • Average rent: £725
  • Average asking price: £210,000
  • Average yield: 4.14%

CF23, includes Penylan and Cyncoed

Pleasant family houses with good local schools.

  • Average rent: £825
  • Average asking price: £250,000
  • Average yield: 3.96%

Under the Rent Smart Wales scheme, all Cardiff landlords must be licensed and go on courses that cover areas like property management. “Some say this makes things more difficult,” says Cunningham. “But it’s inexpensive [courses don’t usually cost more than £100] and makes sure tenants get the service they should.”

The bank does not offer houses in multiple occupation.