While London’s property market is suffering a period of stagnation, some regions in the UK are enjoying a remarkable and unexpected bonus.
As London’s property prices appear to have slowed down, at least temporarily, the focus has shifted to smaller locations across the UK that have been overshadowed until now by the capital.
These areas are fast becoming flourishing residential and commercial centres where people want to live and work, thanks to significant regeneration programmes already underway or planned, good travel connections to key towns and cities and impressive growth in property prices.
What’s more, the locations offer serious potential for investors seeking to diversify their property portfolio or invest at a lower premium and pay less stamp duty land tax than for a property in London.
The localities also offer higher relative yields, attractive to those looking for a monthly income from their investment, thanks to rapidly increasing demand and, as in so much of the UK, a shortage of new homes.
SevenCapital has pinpointed five towns likely to become hotspots in 2020.
A tech hub, the headquarters of companies such as HP, Dell and Hitachi, Bracknell has its own successful business community located near fast, direct connections to London and other important destinations, but enjoys much lower property prices.
The average house price is around £370,000, more or less half that of London, and much less than surrounding areas such as Wokingham (£480,000) and Ascot (£870,000).
Contemporary developments include the Grand Exchange which offers modern features such as a cutting-edge communal workspace, residents’ gym and bookable treatment rooms. Bracknell has also been named recently in The Times as one of the UK’s most successful communities. Property price growth since 2014 has been 20.7%.
With average house prices around £345,000, Slough is roughly £200,000 less than nearby Windsor and half the price of London. The town has the largest number of global company headquarters outside London, including O2 and Mars, and is benefiting from over £1bn invested in regeneration projects.
With the hotly anticipated arrival of Crossrail, Slough’s reputation as a top commuter town has rocketed. Just under 50% of homes rented in Slough are to London leavers. New developments include New Eton House. Property price growth since 2014 has been 18.1%.
The first new town to be built in the UK, Stevenage occupies the lower end of the price scale for commuter locations with average sold prices in the region of £293,000.
Although smaller than Slough, the town is home to GSK’s largest research and development site, one of several large employers in the area, and is the location of the primary innovation and technology centre in Hertfordshire. A train journey takes just 25 minutes to London’s Kings Cross, where Google’s new £1bn headquarters is being built.
Stevenage is undergoing a £1bn regeneration programme, including a £350mn town centre refurbishment project, planned to begin in 2020. Property price growth since 2014 has been 20.7%.
Situated almost midway between Birmingham and London, the town’s location offers commuters a choice of cities at an affordable price. Northampton has enjoyed some of the highest and fastest house price growth, with prices increasing by 5.3% over the last 12 months alone.
If successful in the application for the Future High Streets Fund and Towns Fund, Northampton will receive a £50mn regeneration boost from central government, an investment which is bound to attract businesses, residents and visitors. Property price growth since 2014 has been 23.8%.
Located at the centre of the Oxford-Cambridge arc, Milton Keynes is also a handy 33 minutes by train from London and is listed as one of the top ten locations for house price growth, according to recent Hometrack reports.
Boasting the third highest number of business start-ups per 10,000 of the UK population and a strong economic performance, Milton Keynes is a key member of the Fast Growth Cities group that has led to almost 20% of its workforce joining the knowledge sector.
Little wonder then that the city is expected to double its population to 500,000 by 2050. Property price growth since 2014 has been 21.1%.
Although traditionally these places may not have been considered prime property investment locations, they are rapidly emerging as promising hotspots with robust growth potential, which could offer future success in a progressively varied property market.