The UK property market is the home of unique investment opportunities, ranging from new build development sites to traditional real estate. There are high quality residential investment opportunities on offer for the savvy property investor. The capital has remained the central hub for those looking to invest in high end, well sought-after real estate. House prices are for the most part, continually rising. There is a range of different property available. Buy-to-let is in constant demand. As a highly desirable location for both UK and international buyers, there is long-term growth on offer in the capital that is particularly appealing.
But it comes at a cost. In November, the average for a London property topped £514,000, according to the Office of National Statistics. It has dropped slightly in the new year, to £496,000, as the pandemic schemes are ending. But even so, for many, the cost remains too high.
As a result, the capital’s commuter towns are growing. Located in the home counties, commuter towns allow London-based employees to have easy access to the city but live in the areas that offer more affordable living. As these small worker-communities have seen annual growth, numbers have begun to climb more steeply in recent years. But why now?
Why the rise in commuting?
Since the COVID-19 outbreak at the beginning of 2020, interest in commuter towns has increased. Many city lovers felt the need to leave London as a way of minimising the risk of contracting the virus by seeking more spacious communities. Commuter towns provide not only cheaper properties, but also tend to be located closer to areas of green spaces and offer the privilege of a garden. PwC reported that the population of London could see a fall in 2021 for the first time in over 30 years, as working professionals continue to look to relocate for that country lifestyle.
The pandemic has also introduced the possibility of working-from-home as a permanent option for lots of employees, and therefore buyers are seeking larger properties with space for a home office. With less time needing to be spent in-office, people have been encouraged to take on a slightly longer commute time for when they do need to be there, in exchange for a larger property.
New transport lines, such as HS2 and other regeneration schemes, are making London’s commuter belt popular for investors of property. We regularly support transactions in this area through bridging loans. You can check out some of our case studies for more information on how we can help.
London’s Top Commuter Towns
Based on our experience with property investors, we identified some of London’s top commuter towns that should be on the radar of prospective homebuyers:
1. St. Albans, Hertfordshire
Voted the best place to live in the Southeast by the Sunday Times, this commuter town is only a short train journey from central London. It is also situated 11 miles from London Luton Airport. The Southeast has seen a 1% increase in the private rental sector over the past 12 months leading up to January 2021.
2. Royal Tunbridge Wells, Kent
Royal Tunbridge Wells is a town that holds an array of boutique shops, pubs and restaurants and was voted one of the happiest places to live in Britain by Rightmove. With easy access to High Weal Area of Outstanding Natural Beauty, this area is of increased interest for those looking to purchase a property surrounded by fresh air.
3. Luton, Bedfordshire
Luton is as great commuter town for those looking for a cheaper place to rent or buy, but still have a close connection to the city and London Luton Airport. The house prices have risen by 30% over the last 5 years. It was voted the best first-time buyer hotspot by Zoopla, so best add this commuter town your hotspot list!
4. Peterborough, Cambridgeshire
Peterborough is home to over 60 primary schools and 13 secondary schools across the city, including it’s outskirts and it has also been named as one of the UK’s top Smart Cities.
5. Bedford, Bedfordshire
With new train links being built to connect Bedford to Oxford and Cambridge, as well as it’s connection to London, this is an up-and-coming commuter area. Great for young professionals in particular – it holds the second most popular free outdoor event in England, the Bedford River Festivals.
Buy-to-let investors and commuter towns
Commuter towns are a popular investor opportunity, particularly when it comes to buy-to-let. Residents can enjoy access to London while also being able to live in larger properties that are cheaper.
Whilst rental yields may be higher in London, the attraction towards commuter towns is growing. The pandemic has brought about a desire for spacious properties, away from the crowded city streets. Investment into regional regeneration, infrastructure and transport links are also increasing the attractiveness of commuter towns for buyers and renters alike.
Whilst the love for Prime Central London property will never die, even with lockdown 3 looking to come to an end in the upcoming months and the vaccine roll out thoroughly underway, both city-working tenants and buyers are still considering increasing their travel time to make their money go further.
If you are 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 and bridge-to-let product for more information on how we can help.
Our business development managers are on hand to discuss how bridging loans are deployed to support acquisitions in this popular segment of the residential real estate market.
Visit our contact page for more information.