For investors seeking to purchase at a reasonable price and reap the rewards of high yields and capital growth in the future, locations undergoing significant regeneration projects are typically a good place to start.
Below, SevenCapital outlines its top five recommendations for investors.
The Steel City, famous for snooker, football and being one of the greenest cities in Europe, has already completed its 'Heart of the City masterplan’, which saw the regeneration of the Peace Gardens, the Winter Garden and St Paul’s Tower, as well as the introduction of new restaurants and grade A office space. Now the city is moving onto a £470 million Heart of the City II masterplan.
This includes planning proposals for 1.5 million sq ft of redevelopment, including leisure facilities, quality urban living, public spaces and premium retail units. The masterplan is expected to deliver between 5,000-7,000 new local jobs – ‘a bona fide tick in the box’ of any private landlord or investor looking for an area with increasing tenant demand.
SevenCapital points to the massive transformation the UK’s second city has already undergone over the past 20 years, from run-down and unappealing to the most thriving city outside of London.
It already has a raft of major regeneration projects under its belt or well underway, including the Bullring, New Street Station and Grand Central, in addition to the £700 million Paradise redevelopment and Arena Central.
All of these things have contributed to Birmingham’s ever-increasing population and, as such, a rising demand for homes.
The Midlands Metro expansion, which is well underway, is expected to boost property prices nearby by up to 6% - or around £14,000 on average.
Birmingham’s growth and increasing stature is also showing no signs of slowing down, either, with the 2022 Commonwealth Games set to be held in the city, HS2 in theory on its way and the Birmingham Smithfield Regeneration in the pipeline. This, SevenCapital says, is ready to thrust Birmingham even further into the limelight of a global stage.
Job growth is expected in its thousands and demand from Londoners, due to HS2 reducing commute time between the two cities to 46 minutes, is predicted to revolutionise the city’s housing market.
A city famous for football, law and being the founding place of Marks & Spencer (not to mention a host of other well-known brands), Leeds is one of the UK’s fastest-growing destinations.
It’s the third largest city in terms of size, and has a population of more than 700,000, including a large number of students and young professionals. It has enticed nearly 10% of London leavers to make the North their home annually over recent years, which means it’s no surprise that Leeds is also fast becoming one of the most exciting buy-to-let hotspots in the UK.
When it comes to regeneration, Leeds has several major projects in the pipeline, notably a £3 million revamp of Leeds City Station, and a £270 million facelift to the ‘west end’ of the city - the 2.8-acre ‘Lisbon Square’ site, which is set to almost double the size of the current city centre and boost the city’s economy in the process.
What’s more, a further £18.6 million is earmarked for three more projects: the transformation of City Park in the South Bank, the redevelopment of Temple Green Park and Ride, and a scheme to renovate older homes in the Holbeck area of the city.
One of the birthplaces of the Industrial Revolution, where it moved quickly from a small town to a thriving, teeming city, Manchester has continued to punch above its weight in recent years – and is regularly hailed as a buy-to-let hotspot.
Prices tend to be affordable, while yields and capital gains are strong. As always, there are two sides to significant regeneration, with some complaining that it pushes existing residents out in favour of wealthier ones, and leaves cities full of half-empty luxury tower blocks – a theme explored in the recent BBC2 documentary series Manctopia: Billion Pound Property Boom.
But, as that show highlighted, the city has seen a vast array of regeneration projects over the last 20 years to haul it out of its post-industrial slumber. Perhaps the most notable being Spinningfields, a £1.5 billion regeneration project dubbed the ‘Canary Wharf of the North’.
Like Birmingham, though, there is still a heap more to come. SevenCapital says this will no doubt ‘continue to entice the many investors already singing this Northern city’s praises’.
The largest of the city’s regeneration plans include the £800 million NOMA project in the north of the city, set to transform nearly four million sq ft into office, retail and leisure space, plus the £1 billion proposal to regenerate the Ancoats and New Islington areas of Manchester.
Additionally, there are plans to renovate three key train stations – Oxford Road, Piccadilly and Victoria - which will mean better, faster connectivity across the city.
Once considered the underdog – and portrayed unflatteringly in John Betjeman’s famous poem and the BBC series ‘The Office’ - Slough is now enjoying around £3 billion in investment and regeneration and regularly tops the list of popular destinations for London leavers. In fact, nearly 46% of homes are let to those leaving the capital.
This up-and-coming town sits on the Crossrail route, which is finally set to open fully in the first half of 2022 (after significant delays and complications). Despite the problems faced by the project, officially known as the Elizabeth Line, its mere presence has in itself been instrumental in helping to boost house prices over the past ten years and it’s also been a catalyst for the town’s regeneration plans.
Schemes already in place include The Curve – a public arts and library venue - plus several leisure and sports facilities (including a ‘beautifully designed ice rink’). In the pipeline, meanwhile, are plans to transform Slough’s main high street, via a complete redevelopment of the old Queensmere Shopping Centre in the town centre – a site spanning nearly one million sq ft of office space and 500,000 sq ft of retail units.
A number of housing developments are also appearing across the wider town centre, designed to house the rising population moving to Slough. One of these is The Metalworks, a new apartment development set to complete in Q1 2021.
Andy Foote, director at SevenCapital and a property investor himself, commented: “Regeneration is all about placemaking; transforming an area into somewhere that is attractive to the public as a place to enjoy living, working, socialising and relaxing. That includes having the right infrastructure to improve connections to key locations, for commuting in and out. All of this is what helps to attract and increase demand from tenants, which is key to a successful investment.”