Last week we covered the initial works being started on a new luxury development in Preston, redeveloped by Wigan-based property developer The Heaton Group – just one example of growing investment in a place that gained city status in 2002.
Here, with help from The Heaton Group, we analyse why Preston is on the up and why it’s an increasingly popular location among investors.
According to Chris Holland, director at The Heaton Group, Preston offers plenty for investors at the moment thanks to its fast-improving reputation. The city is one of the most up-and-coming areas of the UK, with significant investment being put into the restoration, redevelopment and improvement of the town centre and surrounding areas.
“The local council and businesses are on board with the city project, creating jobs, an increase in quality of lifestyle and over 20,000 new homes,” Holland said.
“In 2018 Preston was ‘the most improved city’ in PWC’s ‘Good Growth for Cities’ report. In 2019, it was ranked as the best city to live in the North West, surpassing both Manchester and Liverpool.”
Its long-term prospects are also good, Holland says. “It’s intended that by 2026, Preston will be recognised as a highly sought-after place to live and work, not just in the North West but in the UK. In fact, the local economy is expected to grow by over £1 billion in the next 10 years.”
Many regeneration and redevelopment projects are taking place to make this possible, with Preston City Council and Lancashire County Council working together to improve infrastructure, push forward economic growth and ease transport bottlenecks to become more business-friendly and improve office space provision.
There has already been investment into the area of over £434 million, covering Preston and South Ribble, while it’s forecasted that 20,000 new jobs and more than 20,000 new homes will be created.
“A key part of the city masterplan is to make unique places to draw in visitors and encourage people to live in the city centre,” Holland continues.
“The Stoneygate Masterplan is the largest in the city in terms of area, and involves the creation of a new, vibrant urban village.”
A skilled workforce, to meet local, national and international needs, is being developed alongside this as part of the University of Central Lancashire (UCLAN) Masterplan. Over the five-year lifespan of the project, an investment of £200 million is anticipated, to help create jobs, kick-start regeneration and attract inward investment into Preston.
“A core principle of the UCLAN plan is to integrate the university's campus seamlessly with the rest of the city, benefitting current and future generations of students, staff, visitors and the wider Preston community,” Holland comments. “It also includes plans to add a new Student Centre and to open a £30 million-plus engineering innovation centre.”
Another key area for investment is Winkley Square, with over £1 million of heritage regeneration project funding secured from Heritage Lottery Funding. This has allowed the council to ‘restore this handsome square to its former glory’.
In addition, Preston Bus Station has already undergone significant regeneration, while plans are in the pipeline to develop a large public square with the potential to host small and large-scale events and activities.
“Overall, I’d say that ongoing, thoughtful, investment into Preston is making the city a better place to live, work, socialise and visit. Money being spent in the right places is having a transformative effect,” Holland adds.
Does Preston have a thriving rental market?
Matt Eastham, director of Easthams & Co Lettings Agents, Preston, says that since the start of 2019 ‘we have seen unprecedented demand for properties to rent throughout the Preston and in particular within the city centre.’
This has been reflected, he adds, in a 22% increase in enquiries from prospective tenants and rental growth of 7% year-on-year.
“We expect this trend to continue over the next few years as the regeneration of the city centre gathers pace, resulting in a further influx of young professionals and families looking to make this affordable, green and vibrant city their home,” Eastham concludes.
Holland agrees on the growing strength of Preston’s private rented sector, arguing that landlords can expect a rental yield above the national average when investing in Preston.
“Landlords and investors can already expect between 4% and 7%, which is slightly above average when compared to the rest of the UK and a good return for the North West. This is prior to the developments in the area being completed. The average rental price achieved for a flat in Preston is £770 - considerably higher than other areas in the North West where the averages are as low as £550.”
What about the rapidly growing Build to Rent sector? Is it having any impact on Preston’s rental market?
“We’ve just started work this month on Bishopgate Gardens, our largest development to date,” Holland says.
“Due to open in June 2020, the flagship project on Ormskirk Road in the city centre will comprise 130 luxury apartments, with on-site retail (including a coffee shop and hair salon), a concierge service and seating area for residents, and a shared office space.”
As per our previous story, a selection of one, two and three-bedroom apartments will be available, with options for private terraces and two-storey living. Prices are expected to start from £110,000.
“We expect the apartments to be popular with those looking to invest in Preston following the significant investment in the area,” Holland adds.
What are Preston’s main attributes and selling points?
Holland says Preston has a growing, independent cafe and bar culture with quirky places to eat and drink around the city.
“The Market Halls have had a £5 million renovation and offer quality, locally sourced produce, a new ‘box market’ and specialist coffee shops,” he explains.
The local countryside is also a big draw, with Central Lancashire ‘home to some absolutely stunning views and greenery’.
The Lake District is only a short car or train journey away, Blackpool and Southport are in close proximity for those wanting to head to the seaside, and there are some picturesque areas closer to home such as The Avenham and Miller Parks and Beacon Fell Country Park, Holland adds.
Preston also has a number of outstanding historical landmarks, well-known throughout the UK for their significance, such as Deepdale – the home of Preston FC, one of the founding members of the Football League - and numerous war memorials. As one of the oldest settlements in the UK, it’s also steeped in historical significance with several historical sites and landmarks.
“While Preston is in itself a fantastic place to work, the proximity to other amazing employment locations in the North of England is a huge reason to consider living in the area,” Holland says. “With excellent train links, you can be in London or Edinburgh in just over 2 hours and Manchester in 50 minutes.”
Preston in numbers
The city has a population of almost 142,000, a local economy worth £7.4 billion, an employment rate of 83% and a tourism industry which generated £330.7 million in the year to 2018, with 7 million visitors to the city between 2017-18.
As well as the £434 million investment from councils, and the £125 million invested in local regeneration projects, there has also been £200 million invested in the area’s universities, £25 million in new business and £207 million invested in new transport links.
Key industries include defence, manufacturing, education, energy and logistics, with the NHS, EDF, BAE Military, Booths, Warburtons, Fox’s Biscuits, Crown Paint, Burtons Foods, Hinjudja Global Solutions and Huntapac all major employers – while there is a growing green industry in the city.
The Heaton Group have been active in the Preston area for a number of years with developments such as The Sorting Office, Cannon Street, Station Terrace and the upcoming Bishopsgate project.
Founded in Greater Manchester, The Heaton Group aims to create unique property investment opportunities for serious property investors and has over 50 years of experience in the field.
It has produced an in-depth ebook – The Ultimate Guide to Investing in Preston – which aims to highlight why Preston is one of the best areas for investment. Split into three parts – Investment in Preston, Lifestyle in the City and Business in Preston – it analyses everything from yields to commuter links, and property prices to the rental market, in impressive detail.
*All images courtesy of The Heaton Group