How to Spot a Property Gold Mine?
Areas undergoing extensive regeneration schemes have become synonymous with emerging locations, with these projects having the potential to propel both the local economy and the property market.
Typically involving an overhaul of amenities, public realms and much more, regeneration schemes are usually undertaken in less developed areas to meet the changing demands of modern tenants. While the priorities of residents are constantly evolving, tenants typically search for increased accessibility, especially in terms of amenities and retail opportunities.
A prime example of this is Bracknell, which is currently in the midst of the Bracknell Vision – a £770 million regeneration scheme. With a completion date of 2032, this project is revitalising the town with improved pedestrian access, fresh public spaces and new amenities.
The majority of the Bracknell Vision is yet to complete, but The Lexicon – Bracknell’s flagship development – gives insight into what to expect in the coming years. In the heart of Berkshire, The Lexicon is a destination shopping centre full of popular restaurants and cafes, as well as the latest retail hotspots.
Having recognised the town’s potential and its growing demographic of young professionals, Bracknell’s local council has taken the opportunity to meet the demands of both current and future tenants. While the Bracknell Vision in itself could catalyse up to 17.5% growth in property prices by 2025, the continued surge of young tenants will only push this further – making for a property gold mine.
The younger generation are the leaders of tomorrow, so investing in areas with universities offers a wealth of opportunities. With over 2 million students across the UK, this is a key demographic of renters that landlords can target with their Buy-to-Let property.
In city centres, such as Birmingham where there are 15 universities, students make up a large proportion of the population. Accounting for nearly 85,000 of the city’s total population, 27% of these students live in HMOs and rented accommodation across the city, highlighting the prominence of the student demographic in the second city.
Not only do students make for a thriving demographic of renters, but with more graduates now choosing to stay in their place of study, these areas also make for prime long-term investments. With a graduate retention rate of over 41%, the students of today are becoming the city’s young professionals of tomorrow.
Birmingham can be defined as a young city, with 40% of its overall population made up of under 25s. And with Generation Rent spreading far and wide across the UK, the majority of this demographic is now more inclined to rent a property, and for longer. The majority of the Birmingham rental market is now 35 or under, and with this ever-expanding city, the demand for rental property will only increase.
Businesses Moving to the Area
If you’re a prospective investor searching for a long-term investment, instead of considering the current landscape of the area, you should consider its future prospects. Businesses set to move to a town or city are a key indicator of its potential, bringing with it more opportunities for both residents and investors.
Employment opportunities are arguably one of the most important things tenants look for when considering a location to live, and are often at the centre of an emerging location. When deciding on areas to relocate their business or open a regional office, companies will search for those with exceptional transport links and access to a base of highly skilled workers.
Bracknell houses the largest tech hub outside of London, providing the local community with over 40,000 jobs alone and an economic contribution of £10 billion. However, when considering the future of the town, and the employment opportunities emerging from it’s regeneration, this will only onset a domino effect, encouraging more businesses to consider Bracknell for regional office spaces.
As more companies move to the area, the local economy thrives and in turn, pushes the property market to new heights. As a result, investing in locations with promising future prospects, whether that be through regeneration schemes or new business, it is more likely that your property will undergo capital growth.
Transient tenants have long been a key demographic of renters across the commuter belt, but as transport links continue to strengthen across the UK, there are now more opportunities for professional tenants to consider living further afield.
While London living has long been a necessity for the majority of professionals working in the capital, the Crossrail project will expand their living choices. Connecting London Paddington with the majority of the South-East, tenants will be able to get from Slough to the capital in less than 20 minutes.
Bringing 1.5 million more people within a 45 minute commute of central London, hotspots along the commuter belt, such as Slough and Bracknell are expected to become serious contenders amongst transient tenants. We have already seen rising demand push rents over 10% across the South-East, the completion of the Elizabeth Line next year could see rents in these commuter towns increase by another 8% by 2025.
So, how do you spot a property gold mine? As we have seen, there are a variety of different ways to determine the potential of a location. From regeneration schemes, to universities, new business and transport links, investors should focus more on the future of an area as opposed to the current landscape, in order to maximise both rental income and future property prices.