Invest in the London Commuter Belt – The Key to Success
Interested in investing in London Commuter Belt hotspots? Here you’ll learn what you need to consider and areas that present good investment opportunities.
London Commuter Towns are one of the UK’s most exciting regions for investors. As more people move out of London in search of more affordability and quality of life, landlords are snapping up property in towns and cities with easy commutes and access to London.
The Rise of London’s Commuter Belt
The Coronavirus pandemic sparked an exodus from London. As more people sought out space, nature and cheaper property and rent prices. Despite a rise in the number of workers returning to the office, in August 2022, 8% of British homes purchased outside the capital were bought by Londoners. Especially in the first half of the year, the same number as when the post-covid rush got underway.
Remote work trends have meant that many households are keen to make the most of new flexible ways of working. Although, keeping in touch with the city was still top of mind. And it looks like the covid-related housing trend of moving out of London is here to stay.
Houses in London’s commuter belt increased in popularity. Especially as more people moved to these destinations thanks to their proximity to the capital yet more affordable housing. For landlords, properties in commuter towns are set to offer great profit-making opportunities. As these destinations rise in popularity, so do property values and the rent that landlords can charge.
Is it Smart to Buy a Flat in London?
London house prices are expected to fall this year. As interest rates rise and the recession has an impact alongside increasing living costs, mortgage outgoings and unemployment. This will present challenges to the housing market. Although the lack of supply of homes for buyers is expected to continue to support house prices in some areas.
Predictions state that in 2023 London properties will fall between 5-10%. However, location is a huge factor and not every postcode will take a hit. Areas like Penge, Rotherhithe, Canada Water, and Finsbury park, for example, may all offer great investment opportunities. This is thanks to ongoing development and regeneration and good transport links from nearby stations. So is a London flat a good Investment? That will depend on where you buy and what you hope to achieve from an investment standpoint.
Why are London Commuter Towns Popular?
Despite what is going on with property prices in the capital, properties in the capital’s commuter belt are becoming particularly appealing. Especially as workers and families reevaluate their lives and seek out more affordability. With significantly lower property prices while still being close to London, commuter towns are an increasingly attractive place to live.
With property prices at record rates, professionals of all ages are being forced out of London to look elsewhere, or seeking employment opportunities in more affordable locations. As more people move into London Commuter Belt towns, landlords have a buoyant tenant market for their properties.
What is the Appeal of the London Commuter Belt?
When it comes to leaving London and heading to the commuter belt, a big pull is that these areas offer a more relaxed and affordable lifestyle for those that don’t want to completely give up London. Here are a few of the reasons people are heading out of the capital and into the London Commuter Belt.
Compared to the capital, the London Commuter Belt offers cheaper property prices and lower cost of living. This is a great fit for those wanting a more affordable lifestyle but who don’t want to give up all that the capital has to offer.
Commuter towns near to London are experiencing a renaissance thanks to incoming investment and more businesses and individuals moving in. This inward investment and growth is creating an enjoyable lifestyle, offering residents more things to see, do and experience.
London commuter towns offer great accessibility and transport links into the capital. That is to say residents can enjoy the best of both worlds. In particular, Crossrail is helping to reduce travel times to London. In other words it is mitigating the main pain point of a commuter journey into London. As more commuter towns benefit from unprecedented transportation access into the capital, boosting commuter convenience, London Commuter Belt towns are set to experience transformational growth.
- Options Closeby
Locations in London’s Commuter Belt offer a whole host of choice and are just an hour or so from the capital. From moving to the seaside to traditional market towns, to nature escapes to areas with well-rated schools and good-value homes, there’s something for everyone.
In recent years, growth in London has been relatively subdued, while areas like the South East experience unprecedented growth rates. Some areas are seeing growth of upwards of 15% as commercial, retail and lifestyle developments continue to boost the popularity of these areas.
- Job Opportunities
High property prices in the capital combined with changing work trends mean more people are leaving London and many companies are uprooting from the capital into nearby commuter towns. As job opportunities rise, commuter towns become more popular. Areas like Slough already score high for job opportunities and onward investment and the arrival of large business headquarters is making living in commuter towns more appealing, resulting in rapidly increasing tenant demand.
- Family Friendly
With decent schools, proximity to other towns for a change of scenery, plenty of green space and nice,large properties with more outdoor space, properties in London Commuter towns are increasingly appealing to families looking for more space, nature and a relaxed pace of living.
- Transport Connections
Commuter Towns generally still offer easy access to Central London, Heathrow and Gatwick Airports as well as towns like Brighton along the coast, further boosting their appeal.
What are the Benefits of Investing in the London Commuter Belt?
From more space to cheaper living to good quality of life, it’s easy to see the appeal of moving to the commuter belt. For investors, The London Commuter Belt is providing affordable initial costs, growth and accessibility with the capital – all huge drivers for tenant demand
- Strong Yields
Many of the tenants moving out to commuter towns are well-paid London workers who can afford to pay higher rents than local workers. This means investors have a market of good tenets to which they can rent out their property. Strong rents and cheaper property prices mean that landlords can generate higher yields. Here you can find out which cities in the UK offer the highest rental yields.
- Price Appreciation Prospects
While cheaper than central London and with their popularity on the rise, properties in the London commuter belt offer good prospects for price appreciation in the future. While certain commuter towns are already so popular they are costly to purchase property, areas with good transport links and decent commute travel times with good value for money property are still available on the market.
- Rental Growth
Research by Hamptons has shown that the cost of renting in the South East has increased by 10.6%. As towns in the South East improve their amenities and welcome an ambitious workforce with higher earnings, rental prices should remain attractive to investors.
- Property Growth Trends
The towns in the traditional commuter belt – those immediately surrounding London – have seen property prices increase by 313% over the last two decades. In the outer commuter belt, prices have increased 344% over the same period, showing the demand for more affordable property for London professionals.
The ongoing Crossrail project, due to be completed in May 2023, has made the journey into London much shorter. Locations planned for Crossrail saw a boost in investment and tenant demand, and some properties within a mile of stations saw their value increase by 66%.
Tips for Investing in the London Commuter Belt
Investors will be on the lookout for up-and-coming commuter towns that aren’t already too costly and popular to buy in. Other factors are important too, and here’s a few other things to look for in the location of your property:
- Direct Connection to London
Reducing the pain point of a commute into central London will be one of the key factors that make property in demand in the commuter belt area. Commutable areas to London will offer travel times of 40 – 60 minutes into central London. They will also give inventors better prospects than cheaper areas that are further out with poorer transport links.
- Cost of Travel
One of the main things London commuters will need to consider is the cost of their travel into London. As well as whether the ticket price and extra time spent commuting is worth the relocation. Investors should look into the ticket prices and options offered by stations close to their investment property. This is in order to find out how appealing it would be to potential tenants.
Where is the Best London Commuter Town?
The best London commuter town will depend on what you are looking for from an investment. As well as your target rental market. Affordable commuter towns to the West of London are a good option. Especially now that Crossrail links Central London to the West, enabling travel to further out towns like Maidenhead and Reading.
St. Albans in Hertfordshire is regularly voted one of the happiest places to live. Thanks to its countryside surroundings, and it offers convenience with a train to St Pancras in just 20 minutes.
For family-friendly towns, many London workers are looking to historic cities. Like Cambridge, with rail links to the city in 60 minutes and top-ranking schools. The seaside town of Eastbourne offers three-bedroom properties close to the sea for between £250,000 and £350,000.
Where can I Invest Outside of London in up-and-Coming Property Hotspots?
If you are looking to invest in a commuter belt hotspot, here are the best places to live outside London to commute:
- Milton Keynes
Milton Keynes is among the top 10 fastest-growing commuter towns. A 30 minute commute to London Euston, the city offers many an out-of-London solution. In addition to quick and direct links to the capital. House prices in the city increased by 45% from November 2021 to November 2022. Meanwhile, first-time buyers spent an average of £271,000 for their property. Which is 16.7% less than the average price in the South East, which is £404,000.
Just 25 minutes from Paddington and with the Elizabeth line set for completion in May 2023, those that commute into the City, including Bond Street and Canary Wharf find Reading an increasingly attractive commuter town option. House prices are around £370,000 on average and the city is a hotspot for creative and digital industries. As well as the fastest-growing UK region for tech startups as well as offering close proximity to Heathrow.
The Kent town has a population of 300,000. Thanks to the Universities of Kent and Greenwich has a strong student population. Its close proximity to the sea makes it an attractive destination for families, young couples and professionals. Meanwhile the £1 billion of public and private investment is transforming this former centre of shipbuilding into a computer town. A town that offers high-quality jobs and a quality lifestyle with central London just a 45-minute train ride away. By 2035, it is expected that the waterfront renewal, another education campus and railway improvement will create a further 17,000 jobs in the areas.
Bracknell is a London commuter town to watch thanks to its impressive capital and rental value growth. With a £1 billion regeneration plan and a population set to grow by 14% by 2039, the future looks bright for investors. In addition, property price growth continues to outperform the capital. In the same vein with the largest tech cluster outside of London, property prices are expected to remain buoyant.
With sky-high property prices and dwindling yields in the capital, properties in London’s Commuter Belt are looking increasingly attractive to both investors and tenants. As remote working trends encourage an exodus from the capital, London’s commuter belt will remain attractive. Primarily thanks to cheaper prices, more outdoor space and spacious properties while still a reasonable commute into the capital.
While the success of towns in the London commuter belt will depend on the capital’s outlook, offering a good lifestyle and commuting options means they’re likely to remain a good investment. To find out more about investing in London’s Commuter Belt, get in touch with our experts today.