Since the pandemic, there has been an understandable increase in interest for properties in commuter towns. Renters and buyers have been setting their sights outside the built-up city areas in search of cheaper, more spacious property. It’s being fuelled by the pandemic, stamp duty discount and a semi-permanent work-from-home lifestyle that we are seeing being implemented across the UK.
Based on our experience and discussions with property investors, we identified some of London’s top commuter towns that may be of particular interest for landlords and prospective homebuyers looking for property investment hotspots.
1. St. Albans, Hertfordshire
St. Albans is a commuter town that’s only a short train journey from central London. It is also situated 11 miles from London Luton Airport. The latest government Rental Index for the private sector shows the Southeast has risen by 1.3% in the 12 months leading up to June 2021. This growth shows a continuing demand from tenants in this southern region, which could make it a good spot for landlords looking to invest in a new buy-to-let asset.
- Located 21 miles outside of London
- 20-minute train ride to St Pancras International
- Average property price paid: £644,914 (July 2021, Zoopla)
- The average property prices of different property types:
- Average cost of a flat stands at £350,417
- Average cost of a terraced house stands at £555,632
St. Albans was also awarded the best place to live in the Southeast by the Sunday Times in 2020.
Source: Zoopla – The Hert Advertiser
2. Royal Tunbridge Wells, Kent
Royal Tunbridge Wells is a town that holds an array of boutique shops, pubs, and restaurants. In close proximity to High Weal Area of Outstanding Natural Beauty, Royal Tunbridge Wells is gaining interest from buyers looking to purchase a property surrounded by easily accessible green spaces.
Our Homebuyer Wishlist 2021 uncovered the most important factor for current UK homebuyers is whether a property has a garden or outdoor space. This is a luxury that is not easily accessible for properties situated in city centres, without a hefty price tag.
- Located 31 miles outside of London
- 45-minute train ride to central London
- Average property price paid: £565,810 (July 2021, Zoopla)
- The average changes between different property types:
- Average cost of a flat stands at £322,369
- Average cost of a terraced house stands at £438,107
Rightmove previously listed Royal Tunbridge Wells within the top 10 happiest places to live in Britain in 2018.
3. Luton, Bedfordshire
Luton is as great commuter town for those looking for cheaper property to rent or buy, with a close connection to the Capital. It is also in close proximity to London Luton Airport. Whilst it remains within an attract price range, house prices have risen by 30% over the last 5 years. In fact, the East of England has seen an annual rise of 6.9% on average in property value. Rental prices also grew in the 12 months leading up to June 2021. The private rental sector saw tenant’s rental fees rise by 1.7% in total over the course of the year.
Source: Office of National Statistics (ONS) Rental Price June 2021
- Located 29.05 miles outside of London
- 30-minute train ride to central London
- Average property price paid: £276,800 (July 2021, Zoopla)
- The average changes between different property types:
- Average cost of a flat stands at £153,942
- Average cost of a terraced house stands at £232,290
It has also received the title of best first-time buyer hotspot by Zoopla at the end of 2020.
Source: Zoopla
4. Peterborough, Cambridgeshire
Peterborough is home to over 60 primary schools and 13 secondary schools across the city, including its outskirts. With its connection to the Capital and leading education, it’s no wonder why this town attracts property buyers. Peterborough is also looking to welcome nearly 1,500 new homes in a 166 acre of land within the area. The development will likely increase interest in the town from homebuyers, helping raise property value over the upcoming months.
- Located 74 miles outside of London
- 48-minute train ride to central London
- Average property price paid: £243,079 (July 2021, Zoopla)
- The average changes between different property types:
- Average cost of a flat stands at £116,740
- Average cost of a terraced house stands at £169,247
It has also been named as one of the UK’s top Smart Cities.
5. Bedford, Bedfordshire
Interest in this up-and-coming commuter town, is being enhanced by new infrastructure:
- New train links are currently under construction, to connect Bedford to Oxford and Cambridge, alongside its current connection to London
- Bedford is host to the second most popular free outdoor event in England, the Bedford River Festivals. This is generally of keen interest to young professionals, making them an ideal market for property investors and landlords.
If you’re interested in converting residential to investment property, such as buy-to-let assets to make the most from your property investment, then our conversion and refurbishment finance could help. Find out more here.
- Located 46 miles outside of London
- 47-minute train ride to central London
- Average property price paid: £359,542 (July 2021, Zoopla)
- The average changes between different property types:
- Average cost of a flat stands at £180,680
- Average cost of a terraced house stands at £257,309
Source: Zoopla
The area has also seen an increase in new housing developments by developers such as David Wilson Homes and Linden Homes. Many commuter towns are being expanded due to the continuous increase in housing demand.
If you’re in need of a development exit finance, then contact our team today to see how we can help. You can see our developer exit loan rates here.
Why the rise in commuting?
Whilst these well-located towns have always been of interest to renters and first-time buyers, numbers have started to climb more steeply in recent years. But why now?
Since the COVID-19 outbreak at the beginning of 2020, interest in commuter towns has increased. As well as being less crowded, they often offer:
– Cheaper properties
– Opportunity to purchase a property with a garden
– Usually surrounded by large areas of picturesque green spaces
The pandemic has also introduced working-from-home on a regular basis by many UK employers, and many employees are now committed to this working style on a semi-permanent basis. Therefore, buyers are seeking larger properties with space for a home office. With work now including time at home rather than just in the office, commuters we are seemingly more willing to increase travel time in exchange for a larger home. The desire for space has seen more people move away from the crowded cities to make their money go further. As a result, the capital’s commuter towns are growing.
For examples as to how we can help you invest in residential properties located in England, check out some of our case studies here.
The current UK housing market
The UK property market is the home of unique investment opportunities, ranging from new build development sites to traditional English real estate. House prices have been rising as demand continues to surge. The UK House Price Index for May 2021 saw its first dip in monthly difference, but the average house price remains 10% higher than the previous year at £255,000
- Average house value for England came in at £271,000 (9.7%, Wales £184,000 (13.3%), Scotland £171,000 (12.7%) and Northern Ireland (149,000 (6.0%). All saw a rise of 6% or higher.
Source: House Prince Index May 2021
Despite the first stamp duty reduction that came into play at the start of July, decreasing the maximum savings from £15,000 to £2,500, the property market has remained highly competitive in nature. However, this increase in activity has seen a struggle in supply and demand. The gap has reached its widest since 2013, adding even more pressure onto house prices.
Source: Independent – Which
Whilst buyer focus may generally rest outside the capital for the time being, London is still seeing property activity. The Capital has seen a positive recovery since its Covid downfall. Over the past 12 months, London has witnessed an average property price increase of 5.2% according to ONS for May 2021.
As the UK enters a restriction free world, it’ll be interesting to witness the affect the new normal will hold over the UK property market.
Source: Gov.uk
How can bridging help?
If you’re interested in purchasing an investment property in London’s commuter belt, get in touch with a member of our team today. You can view our residential bridge loan and buy to let criteria here.
Our underwriting team and business development managers are on hand to discuss how unregulated bridging loans can support residential investment opportunities.
Visit our contact page for more information.