In an unprecedented global climate, and with the new tax year looming, investors everywhere will be thinking about the future and their future investments, according to SevenCapital.
The property investment and development company says that for those for whom the current coronavirius pandemic means a little more time on their hands, or those who want to maintain a sense of business as usual, now is the perfect time to re-evaluate their investment strategy for the future or potentially carry out some research into new territories.
According to a recent report by lettings management company Howsy, two-bedroom properties make the best investment for buy-to-let landlords when it comes to rental yields. Meanwhile, another recent report found that the South East is the region with the highest average weekly wage amongst residents outside of London.
With this in mind, SevenCapital has conducted research into the best areas in the South East for residential property investment. This is based on average wage versus average rent, cost to buy, rental yield and five-year capital growth for a typical two-bed property in each area.
The top five areas are revealed below.
Home to some of the highest average wages, and with good rental values, yields and growing house prices, Slough topped the list with a strong performance overall.
The town’s prime position on the proposed Crossrail route (now set to be ready by summer 2021 at the earliest, and potentially further delayed by the current lockdown) is giving Slough a boost, as it attempts to once and for all shed the negative reputation it has long been shackled with. This hasn’t been helped by various references to it in popular culture – such as the scathing John Betjeman poem and its starring role in BBC Two’s The Office.
But it’s trying hard to change that perception, with Crossrail and the planned Western Rail access to Heathrow both designed to make commuting from this well-connected town even easier in future.
These infrastructure projects have already been the cause of significant house price growth in the area.
Slough was recently named the best place to work in the UK by Glassdoor for the third year in a row, and with a £3 billion high street regeneration programme still in the pipeline, SevenCapital believes the town’s future, where tenants, investors and growth are concerned, is bright.
Second on the list, and another large town in Berkshire, Bracknell has a higher average wage and monthly rent and, for investors, a higher average property price too.
Slightly further away from London than Slough, but still at the heart of the UK’s own ‘Silicon Valley’, Bracknell is a popular commuter location as well as having a thriving tech economy in its own right.
It is currently in the middle of a £770 million town centre revamp. This has already seen the introduction of a £240 million retail and leisure destination, The Lexicon, and Boris Johnson pitching it as the ‘epicentre of global free trade’, which makes it easy to see why Bracknell’s population is predicted to grow by 15% by 2036.
SevenCapital says Bracknell is still in the early stages of modern, buy-to-let development, but for investors looking for early entry into one of the South East’s most up-and-coming hotspots, Bracknell is one to watch.
World-renowned for its famous university, Oxford has long been in demand from both tenants and investors.
According to SevenCapital, average wages are similar to Slough and Milton Keynes, but property and rental prices here were both the highest of the firm’s top five. This means that, whilst growth in percentages looks lower than Oxford’s contenders, in actual figures, it rates much higher.
Oxford isn’t resting on its laurels, however. It has a Strategic Economic Plan that will see 28,000 new homes and 24,000 new jobs, plus hotel, offices and a new transport interchange introduced.
SevenCapital says it’s one for investors looking for an investment at the higher end of the market to keep an eye on.
Named twice by estate agent Jackson Stops as its top commuter hotspot, Luton demonstrates great value for money, according to SevenCapital, with investors likely to get plenty of bang for their buck. It has an almost comparative wage to the top three, but lower price points for both rent and house prices.
With an airport, three train stations and a 22-minute commute into London, along with £1.5 billion of investment into key development and regeneration projects, there seems little doubt about its attraction to tenants.
The town has also witnessed 30% price growth over the last five years, with SevenCapital saying Luton is a great option for investors looking for capital gains with a lower entry point.
While not technically counting as the South East, Swindon is a similar distance from London to Oxford but has a far more affordable price tag.
The town – which, like Slough, has had to battle against various negative perceptions - is still at the beginning of its evolution as a top investment hotspot, according to SevenCapital. It has lower average rents, but the strongest rental yield of the top five, showing its potential as a buy-to-let hotspot.
Swindon has a multi-million-pound investment deal with SevenCapital to redevelop its North Star site into a major retail and leisure destination – including one of the largest real snow indoor ski slopes in the UK – and a £300 million town centre regeneration plan in the pipeline. As a result, the firm says Swindon is going to see a major transformation over the coming years and is one to watch for investors whose strategy includes key regeneration zones.