For those looking to invest in property in the UK, the larger cities around the country are normally seen as the best places to look in order to find strong returns. London, Birmingham, Manchester, Leeds and Liverpool are those that most people would probably mention when asked where the safe havens are located, but is there a new player in town?
According to new data, Luton may actually be one of the best places for buyers to put their money moving forward, with both capital gains prospects and rental potential looking positive after a number of good years for the town.
Rental income comes first for most investors when looking at buy-to-let purchases. After all, monthly income is the main reason people look towards this sector. However, it’s not the only issue to consider, and the prospect of selling a home for far more than it was purchased for down the line, is another reason people see the private rented sector as a viable asset.
According to research from Rightmove, the next three to four years will see investors’ rental assets climb considerably in value, with prices set to rocket by an average of 30.2 per cent nationwide by 2019, and Luton will be one of the best performers in this time, capitalising on the spread of London commuters away from the capital.
The data shows that the Bedfordshire town’s property value is forecast to jump by an average of 41 per cent between 2016 and 2019, adding another £56,000 to the value on average. This makes it potentially a fantastic investment hotspot with the possibility of such a big jump in value in a relatively short space of time.
While capital gains are a favourable benefit for anyone with a long-term strategy in the rental market, however, first and foremost comes rental or passive income, and again Luton is among the predicted top performers in the next few years according to Savills.
Lucian Cook, Savills UK head of residential research, said the demand for areas away from London among investors is evidence that these will be the new hotspots in buy-to-let.
“The residential investment focus is likely to shift to the regional cities where, in comparison to London, the cost of entry is lower while both income yields and the capacity for medium term price growth are higher,” he added.
In terms of the top ten areas for rental yield growth in the coming years, Savills reports that Luton will come in at number eight, ranking alongside the likes of Birmingham, Plymouth and Reading for potential returns for savvy investors.
So, with such strong predictions for both capital gains and future rental potential, is Luton set to become the new rental market star by the end of the decade?
Click here to view Opto House – Experience Invest’s latest income generating property in Luton.