Investors shift out of London
BY TOM HODSON
The UK property market has long been popular with both domestic and international investors, a stable market that delivers excellent returns. While the anchor of the UK market has historically been London – especially since the recession – increasingly expensive prices, waning demand and a growing cost of living have meant the attention of many investors has shifted.
The spotlight is now on the London commuter belt. Providing easy access to desired amenities with significantly lower living costs, commuter towns are becoming an increasingly popular prospect for both tenants and investors. As London becomes less affordable, more commuter towns such as Slough and Basingstoke are capitalizing, completing aspirational, stylish developments and regeneration schemes to attract tenants, investors and workforce talent.
So as the region continues to improve, why should South African investors be looking to stake their claim? Why head to the London Commuter Belt?
Firstly, and most importantly, it’s affordable. With affordable entry prices, a lower cost of living and excellent accessibility, commuter towns generally offer a great fit for those who want a less expensive lifestyle but fast and easy access to all the opportunities available in London.
The Commuter Belt is also experiencing something of a renaissance. From Slough to Reading, Basingstoke to Woolwich, commuter towns are attracting previously unprecedented levels of inward investment which is helping them to transform into highly desirable areas, where people want to live, enjoy and invest in. While London continues to see declining property prices, certain Commuter Belt locations are expecting growth of nearly 35% thanks to commercial, infrastructure and lifestyle-focused redevelopments.
As of 2018, nearly 6.2% of 2,000 London-based respondents to a Grant Thornton survey said they were looking to move away. If we apply this average to the whole population, that’s over 520,000 or one in every 16 that are looking for an alternative. This isn’t just older demographics either. A second survey focused on teenagers and students found that out of 1,300, a narrow majority would not want to live or work in London.
Many Commuter Belt towns are ranking well in terms of potential, setting themselves up as excellent investment opportunities thanks to good schools, low unemployment and impressive amenities. These factors are driving tenant demand, providing for young professionals and families that are leaving London and importantly, good returns for investors.
According to Wayne Morris, National Business Development Manager at SevenCapital South Africa, accessibility is vital to the Commuter Belt’s success. “As the name suggests, commuter towns such as Slough are proving increasingly popular with investors because they are ideal for professionals that want direct transport links to key UK destinations such as London or Oxford. With generational developments such as Crossrail completing this year, tenant demand in these top commuter towns is set to increase dramatically, boosted by lower travel times and high-capacity trains.
“One of the largest infrastructure projects in Europe, Crossrail is already having a huge effect on investment and tenant demand in top Commuter Belt locations. Since 2009, properties within a mile of a proposed Crossrail station have increased in value by 66%. Savvy investors are identifying the incredible opportunities that these properties can offer, attracting the people that want to work in London but not necessarily live there.”