Luton is a town with historic routes, famed for its mention in a notable Campari advert. But it has long been overlooked as a place with big potential for property investment. However, this is set to change. Recently the town has undergone a massive amount of regeneration and investment. And when you consider its ideal location and excellent transport links, you’ll start to understand this commuter town’s growing appeal amongst property investors.
Recent Large Scale Investment
In 2016, Luton launched a £1.5billion investment programme, with major companies committing to funding, and projects that are set to transform Luton into one of the UK economy’s major players.
The Luton Investment Framework is a 20-year plan launched by the town’s local authority. Eight sites for major strategic development have been earmarked for new leisure, retail, and housing opportunities alongside areas designed to boost employment in the creative, technology, engineering and aviation industries. The goal of the framework is to enhance growth, health, wellbeing and prosperity for local people by transforming major areas of Luton and creating more than 18,500 jobs.
The scheme includes plans such as London Luton Airport’s £260million new passenger transit system, aimed at making movement between the airport terminal and Luton Airport Parkway railway station more efficient for staff and travellers by reducing journey times. A further £110million redevelopment of the airport itself was also announced, with the aim of raising annual capacity from 12 to 18 million by 2020 – an increase of 50 per cent!
Companies are seeing the potential of Luton as a hub for business and commerce, from Signature Flight Support, who pledged £26million towards the programme, and Capital &Regional (owners of the impressive The Mall shopping centre) who announced their large redevelopment plans.
Even Luton Town Football Club is getting in on the action! The company behind the club, 2020 Developments, is looking to build a new football stadium.
Luton has also secured £1.5 million funding for the Arts Council to develop the arts and cultural infrastructure within the town.
All of this is sure to drive up the number of young professionals looking to live and work in the town, transforming Luton into a centre for high-quality jobs.
Excellent Transport Links
It is well-known that Luton is a short 20-odd minute train ride from London, as well as being home to one of the UK’s major capital airports, London Luton Airport. This already makes the town an ideal location for workers looking to commute into London.
But with so much investment planned for Luton’s transport infrastructure comes the promise of even greater lifestyle and business benefits.
Thanks to the new transit system between the airport’s terminal and Luton Parkway rail station, journey times into central London from the terminal itself will be reduced to 30 minutes by 2020 – quicker than the journey times from Gatwick and Stansted!
The airport itself is currently the UK’s fastest growing airport. Over the next 20 years, London Luton Airport will undergo a series of developments, increasing capacity and creating thousands of new jobs.
Luton also sits alongside the M1 motorway, with the A6 originating in the town. These two major roads connect London, Leeds, and Manchester respectively, providing a vital link from the south of the country to the north.
Strong Growth in Property Values and Rental
In 2014, Rightmove and Oxford Economics predicted that prices in Luton would grow by 41% over the following five years. And it seems they were right, with house prices having risen nearly 30% on average in the last two and a half years! Much of that growth has happened in the last year, with property values increasing by 19.4% in 2016. That meant as much as £42,000 was added to the price of local properties. And there’s no sign of this trend stopping any time soon – welcome news for investors looking for the best options for capital appreciation. In fact, this massive surge in the local property market saw Luton become the top-performing town for house price growth in the UK for 2016.
Meanwhile the rental market in the town is also looking healthy. Rents have increased by 4.23% in Luton in a year, whereas in London they have actually fallen by 1.05%. But given the difference in average rents in the respective areas, Luton still represents the cheaper option for many city workers. This means landlords in Luton benefit from a growing demand for housing there, whilst achieving better yields than their London contemporaries.
The mix of great schools, blossoming arts scene and the popular cultural event that is Luton Carnival make the town increasingly attractive to families and city workers alike. And with so much investment in the town, the council is aiming to continue to improve Luton’s liveability factor.
All of these factors mean Luton is now becoming a fast favourite of savvy property investors, offering a stable income, great capital growth, and a fantastic return on investment.
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