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Investing in London commuter belt property

In recent years, London commuter belt property has emerged as a lucrative alternative for buy to let investors. In this feature, we examine why Luton has emerged as a hotspot for property investment and we look at the asset classes offering the best returns.

  • Last updated: Mar 2020

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In recent years, London commuter belt property has emerged as a lucrative alternative for buy to let investors. In this feature, we examine why Luton has emerged as a hotspot for property investment and we look at the asset classes offering the best returns.

What is the London commuter belt?

The London commuter belt refers to towns in the surrounding counties of the capital that have a practical road or rail connection into the city. Although there is no physical boundary, London’s commuter belt mainly refers to areas in the South East and East of England.

London’s commuter belt has experienced a rise to prominence, mainly due to the high cost of living in the capital. A trend in city workers moving outside of London has seen property markets in selected towns and cities perform particularity well for rental and capital growth.

In this feature, Experience Invest maps the rise of London commuter belt property and examines why selected locations offer investors higher than average returns.

The appeal of London commuter belt property

Discover how Luton is becoming the number one choice for investors looking to secure returns from property within a commutable distance from London.

What you need to know about investing in London commuter belt property

  • What are the best commuter towns to London?
    The best commuter towns to London offer a fast commute into the capital and provide homeowners and renters with better value for money. For city workers, it’s all about securing a better work-life balance. Let’s face it, if you’re going to have a longer commute into work, your home life needs to counterbalance the extra time it takes to travel. Luckily, most commuter towns offer fast routes into central London. Luton, Slough, East Croydon and Woking are all areas which have emerged as popular choices for commuters.
  • Is buying property the best investment?
    Buying property is one of the best investments and the UK is a stable and secure location for investors. Great Britain has clear homeownership laws and the tangible nature of property is much more appealing than stocks and shares.

    The strength of the UK’s property market provides investors with the freedom to diversify their portfolio across a range of sectors. From off plan residential property to student accommodation, from commercial real estate to hotel suites, the UK is a prime market for investors to own an income generating asset and potentially secure capital gains.
  • Is Luton a good place to invest in property?
    Luton is the best performing property market in London’s commuter belt and offers investors returns unrivalled by other towns surrounding the capital. Luton is one of the 5 most affordable housing markets for commuting to London.

    The low entry level price of property in Luton (and subsequently lower Stamp Duty obligation) and the demand for housing in London’s commuter belt, has helped the town to emerge as a good place to invest in property. Jump to the Luton property investment section in this article to find out more information.

The rise of London commuter towns

The high cost of living in London has seen the number of people living in the capital decrease by 550,000 over the last 10 years.
Despite a decline in number of people residing in the city, the variety of business opportunities and jobs available continue to attract workers.

In recent years, towns and cities within commuting distance of London have experienced somewhat of a revival, bridging the gap between affordability for those working in the city.
In recent years, towns and cities within commuting distance of London have experienced somewhat of a revival, bridging the gap between affordability for those working in the city.
London commuter towns were the focus of the 2019 TotallyMoney commuter hotspots report. Using four metrics (house prices, season ticket prices, journey times and life satisfaction), the tool has ranked 116 London commuter towns and cities.

In terms of affordability, property in Luton, Overton, Purfleet and Tilbury are the most affordable in the index, whereas Virginia Water, Ascot, Harpenden and Brighton are the least commuter-friendly towns.
Luton has been crowned the best commuter belt property hotspot for two consecutive years by estate agent Jackson-Stops.
Luton has been crowned the best commuter belt property hotspot for two consecutive years by estate agent Jackson-Stops.

The town’s affordable housing market, simple 22-minute train journey into London and overall quality of life has propelled Luton to the top of the index. For buy to let investors, property in the Bedfordshire town offers the highest return on investment currently available in a location commutable to London.

Commuter towns map

The below commuter towns map outlines popular areas for city workers who travel to London for work.
Source: totallymoney.com
Click to view interactive map

Luton Property Investment Focus

Why Luton?
The Bedfordshire town of Luton is located just 30 miles north of London. This prime position provides excellent transport links, connecting the town to central London by train in just 22 minutes.
Located just 10 miles from the M25, Luton is one of the best-connected towns in London’s commuter belt however, it’s not just its links to the capital which have proven popular to residents and businesses.
Located just 10 miles from the M25, Luton is one of the best-connected towns in London’s commuter belt however, it’s not just its links to the capital which have proven popular to residents and businesses.
The town is in the heart of an area referred to as the ‘Golden Triangle’, which groups Oxford, Cambridge and London. This growth corridor provides access to key employment hubs, leading world-class universities and regional shopping and leisure districts.
London Luton Airport
70 Global destinations just a flight away
It is also home to the UK’s fifth largest airport, London Luton Airport, which operates flights to international destinations daily.
£1.5 billion Luton regeneration
Spanning over 20-years, the £1.5 billion Luton regeneration plan is set to create around 18,500 jobs and will bring a wealth of new opportunities into the area.
Luton is one of just 24 areas across England to secure Enterprise Zone Status, which has been designed by the government to encourage economic growth across the local area. London Luton Airport is at the heart of the designated zone and, having already undergone a £160 million transformation, the airport is expected to add millions of pounds to the local economy in the coming years.
To compliment the airport’s renovations, an additional £255 million worth of investment has been earmarked for the Luton DART; an energy efficient, cable-driven shuttle that will operate between Luton Parkway Rail Station and London Luton Airport and will take just 4 minutes.
To compliment the airport’s renovations, an additional £255 million worth of investment has been earmarked for the Luton DART; an energy efficient, cable-driven shuttle that will operate between Luton Parkway Rail Station and London Luton Airport and will take just 4 minutes.

Travel time from London’s King’s Cross station to the airport will be reduced to 30 minutes. Luton DART is expected to open in 2021 and will create 500 jobs.
Home of the University of Bedfordshire, Luton is also a prime location for Purpose Built Student Accommodation (PBSA) investment.
The Luton campus has undergone a £40 million redevelopment in the shape of a new STEM facility. The cutting-edge facility is part of a wider £180 million investment into the University of Bedfordshire. In total, there are over 20,000 students from 100 countries studying at the campus.

For property investors, Luton’s PBSA market offers reliable rental returns from a continual influx of students attending course at the establishment.

Luton property hotspot

An independent survey commissioned by Experience Invest in early 2019 unveiled Luton as a property investment hotspot for UK buy to let investors.
The inclusion of Luton in the UK’s top ten locations for property investment is further evidence of the rising popularity of London’s commuter belt.

Looking at the wider picture, it is easy to see why Luton is a prime location for investment. Data released by Project Etopia has shown that Luton is 22 years behind the rate of housebuilding required to meet demand.

The town has also experienced a population boom in recent years, with the number of people living in Luton rising by 8% since 2011 – a figure significantly larger than the national average of 4.35% (ONS).
House prices in Luton
The cost of living in London has made commuter belt towns and cities like Luton more attractive.

According to Zoopla, the average house price in Luton stood at £269,302 in November 2019 (£316,131 UK average), rising by 4.12% year-on-year.
According to Zoopla, the average house price in Luton stood at £269,302 in November 2019 (£316,131 UK average), rising by 4.12% year-on-year.
A high demand for property in Luton has seen values climb by 34.15% over the last 5 years. Since the recession, when property values in areas across Britain plummeted, house prices in Luton have increased by 54.49%.

Despite the impressive house price growth in Luton, the value of property sits considerably below the national average and, when compared to regional counterparts, housing in Luton is very affordable.
Rental market in Luton
Rental market in Luton
There are many encouraging signs that paint a positive picture for buy to let property in Luton.

The town is home to a large concentration of Private Rented Sector (PRS) property. In fact, 24% of Luton’s population live in PRS housing.

When compared to the UK average of 18%, it is easy to see how Luton has repeatedly achieved buy to let hotspot status in LendInvest’s BTL index.
When compared to the UK average of 18%, it is easy to see how Luton has repeatedly achieved buy to let hotspot status in LendInvest’s BTL index.
According to Savills, the number of people living in PRS in Luton increased by 95% between 2001 and 2011. The town’s centre has been a popular choice for renters, with around 60% of property in this area occupied by PRS tenants.

For investors and developers, it is easy to see where the demand for rental property lies. New-build developments in Luton offering contemporary living spaces and easy access to the town’s transport links will naturally appeal to the town’s renters.
If you’re looking for a Luton property investment, contact Experience Invest for our latest range of opportunities.

Now is the time to invest...

London is one of the world’s most-loved cities however, as the cost of living in the capital continues to rise, there is a real need for investors and developers to combat the undersupply of affordable housing in the city.

Due to the price of property and land in London, towns and cities located in commutable areas may become the answer to unlocking more housing on the market.

For buy to let investors and developers alike, investing in London commuter belt property could provide higher capital growth potential and reliable rental returns for many years to come.
London commuter belt property
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Imperial Square
London commuter belt property
  • 1 & 2 bed apartments
  • Expected 6% NET rental return p.a.
  • Early investor discount
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