Slough Property Price Forecast Outpacing UK Average in 2020
After an eventful end to 2019, the New Year looks set to deliver a more positive outlook for both the UK market and Slough. With a majority government in power and a clearer stance on Brexit, more investors will be looking to invest in emerging markets such as Slough.
An established commuter town in a fast-growing South-East region, Slough is poised to continue its rise as an ideal alternative to a London market that is only just forecasting recovery.
Slough Rental Statistics
Slough’s position as a regeneration hotspot and commuter destination has contributed to an above-average rental performance against its peers in the South East. With a redevelopment plan worth over £3 billion, a rapidly rising population and an average property price of £379,254 compared to London’s £628,416, Slough can currently deliver rental yields between 4% and 5% according to TotallyMoney, putting it ahead of the UK average (3.53%)
Property in Slough has also seen better growth when compared to London – 19% versus 12% over the last five years. This is only set to improve with the introduction of major projects such as Crossrail – Slough and the wider South-East is currently predicting a 14.8% increase in property price growth and an 11.5% increase in rental prices by 2024.
Looking ahead, it’s expected that South-East prices will outpace the national average by 2022 with PwC forecasting a 3.3% increase per year. JLL have also recognised Slough as a growth hotspot, ranking it as having the 4th highest ‘long-term potential’ of the wider Commuter Belt.
Upad data suggests that the best property for delivering rental yields is a two-bedroom flat, which typically provides yields upwards of 5%. With this in mind, a two-bedroom apartment in Slough would be the optimal combination for building consistent and above-average rental yields. New Eton House in Slough, for example, is predicted to deliver rental yields of 5.1% over the long-term, ahead of both the UK and Slough averages.
Supply and Demand
Demand for Slough continues to be one of its driving forces. From the career opportunities it can provide to the commuter workforce it serves, the residential market in the town is highly-competitive. Nearly 30,900 people live in Slough but commute outwards and 46% of the homes in the town are let to London renters, demonstrating the quality of the travel links that make Slough such an established commuter destination.
Last year the government published its first ever housing delivery test which assesses how many homes have been built in local authority over the past three years as a percentage of the number required. The pass rate for the test is 95% of the target being delivered and Slough only delivered 86% of its target. This alone reinforces the challenges that local authorities are facing across the UK – there’s too much demand for supply to meet.
Key Regeneration Driving Growth in Slough
In the last decade Slough has pushed a number of key developments as part of its ‘Heart of Slough’ project – a plan that is continuing into 2020 and beyond. From new cultural spaces to leisure facilities and residential accommodation, the regeneration of Slough is highlighting its potential as an investment location.
Originally estimated to be around £1 billion of regeneration, the total has now risen to around £3 billion with new retail and residential developments announced. Redevelopment is always a key indicator for growth as the town continues to build the amenities that the modern resident wants.
Arguably the most important (and most well-known) development for Slough, Crossrail will revolutionise travel around the South East. Officially part of the TfL network (and now officially on the Tube map), the Elizabeth Line is increasing passenger capacity and reducing travel times around the region – a huge boost for a town that benefits massively from commuting professionals.
Economically, Crossrail is estimated by TfL to have a £42 billion benefit on the UK economy, building better links between London’s commercial districts, providing 55,000 new full-time jobs and 75,000 new business opportunities during construction.
Queensmere Shopping Centre
One of the most recent acquisitions in Slough’s project is the Queensmere Shopping Centre site. Developer British Land is expected to submit a planning application in 2021 and the scale of the proposal is immense. Plans suggest between one and two million sq.ft of office space, 500,000 sq.ft of retail and leisure space, between 1,000 and 1,200 apartments and a new food hall, creating a truly mixed-use development.
If it goes ahead, this redevelopment will be a huge boost for Slough and will create an entirely new destination for the town.
While refurbishment of the Ice Arena completed in 2018, it has continued to evolve and now represents a true leisure hotspot for Slough. Home to the Slough Jets, the Ice Arena has received an extension that means it is now home to a fully refurbished ice rink, cafe, climbing wall, gym and ‘party zone’.
The continued redevelopment of the Ice Arena shows Slough’s commitment to creating a real community space in the town as well as encouraging residents to stay active.
The Centre Leisure
Built as part of Slough Urban Renewal, ‘The Centre Leisure’ is a multi-million pound investment that includes an eight-lane swimming pool, sauna and steam room, four court sports hall, gym and three exercise studios.
Discussed in November 2019, Slough council is looking to introduce an incubation hub in the former Marks & Spencer store. This hub is designed to support start-up businesses in the digital and creative sector, encouraging the natural progression of Slough’s thriving commercial landscape.
Slough Economy Growth
Slough’s economy is one of the highest performing in the region and delivers £9 billion to the wider UK economy. Thanks to a thriving commercial landscape and a development pipeline primed to deliver progressive mixed-use spaces for co-working, Slough is making the necessary moves to stay relevant.
- Home to over 5,400 businesses and 92,000 jobs
- The most productive urban area in the UK
- Gross Value Added (GVA) of £82,000 per worker
- 4th for productivity in the Technation report
- Largest Trading Estate in Europe – 20,000 employees & 500 businesses
Looking forward, a stronger UK economy will have major benefits for Slough – particularly in terms of investment into the wider tech sector. Slough’s business district includes a number of global brands that are connected to the tech industry and it’s infrastructure is ideal for hosting start-ups that want to be at the heart of the action.
As a major destination within the wider commuter belt, it’s vital for Slough to drive forward with the momentum afforded by a development such as Crossrail. Over the next year it’s likely Slough’s growth will accelerate as these developments come to fruition, boosted by a thriving commercial landscape and rapidly increasing population. Ensuring there is ample commercial supply to meet demand – demonstrated by British Land’s move to transform Queensmere shopping centre into new office spaces – will contribute heavily to Slough’s rising prices.