Bracknell vs London Penthouses
As market attitudes shift towards ‘amenity-led’ spacious apartments, there’s a clear demand for what penthouses can deliver.
Long seen as a luxury, premium product, penthouses typically represent the ‘best of the best’ in any residential development.
For investors, this means a premium tenant that delivers a premium rental income. While this provides consistent returns, something investors are always looking for; it can also help mitigate void periods, a huge challenge for any property investor.
The South East is also forecasting itself as a prime investment region heading into 2020 and beyond. JLL suggests that the South East could see property prices grow by 14.8% over the next four years – driven by new developments such as Crossrail.
With rental prices also predicted to rise over the same period, this would make emerging markets in the South East highly attractive for savvy investors.
But why would an investor choose a penthouse in Bracknell, for example, over a penthouse in the traditionally popular London market?
Bracknell Penthouse vs London Penthouse
Firstly, there’s no doubt that London in general is losing its lustre amongst both investors and tenants. Since the global financial crisis in 2008, London has seen a huge increase in prices before growth rapidly stagnated thanks to Brexit uncertainty
This means London penthouses are typically one of the most expensive property types in the UK market and unaffordable for the average renter.
This is why many people look to emerging markets such as Bracknell, where the premium feel and quality associated with a penthouse apartment can be found in a much more affordable market with higher potential for growth and direct access to London.
A brief look at Savills reveals that London Penthouses could be anywhere up to £7,500 a month, while Bracknell we expect is closer to £1,600/£1,700. This opens up Bracknell to a much wider tenant base and yet for investors, JLL are still forecasting rental prices in the town to experience broader growth than London over the next four years.
The Grand Exchange is a prime example of meeting this gap in the market as the first and only penthouses in Bracknell, it’s a completely unique proposition at the heart of the town. With state-of-the-art interior design and contemporary, resident-only facilities, The Grand Exchange is designed entirely for the modern tenant.
With a reputation as the ‘heart of UK technology’, Bracknell continues to attract high level tenant demand, global business and inwards investment because it represents a more affordable market for people leaving London that doesn’t compromise on the opportunities available.
340,500 people left London in 2018 and it’s estimated that even more will have left in 2019. When we examine this over the decade, 550,000 more Britons left London than moved to it since 2010.
Research shows that out of those leaving, people in their 30’s were most likely to leave, with 40% of first-time buyers leaving London purchasing in the surrounding Commuter Belt thanks to the affordability the region can provide.
This affordability is further highlighted when we compare living costs in Bracknell and London. On average, it costs £28,424 a year to commute between Zone 1 – 5 and live in London while it only costs £16,152 to live in Bracknell and commute to London – a huge £12,272 difference.
Looking at property costs exposes the gulf in prices further. At the time of writing, the average Bracknell property costs £385,860 while the average London property costs £642,890.
That said, over the last five years, Bracknell property prices have grown by 30% while prices in nearby Reading and London have only grown by 14% and 6% respectively. Bracknell represents a more affordable area with more potential.
It’s easy to see why investors are identifying prime investment assets such as penthouses in emerging hotspots such as Bracknell, taking advantage of a gap in the market that is facing undersupply and thus, building itself up as a potentially lucrative investment.
Take the concierge service available in the Penthouses at The Grand Exchange for example. GoCompare research shows that 72% of 25 – 34-year old’s look for a concierge when renting and only a third of the market actually offers the service. It’s this amenity-led focus that is shaping the rental market and a prime example of how The Grand Exchange is building itself for the modern tenant
While Bracknell as a market is forecast to have a much better 2020 than the London market, the effect is only amplified when we take penthouses into account. With a lower initial price point and a much wider potential tenant base but the same premium lifestyle with London only a train away, Bracknell penthouses represent a key niche for investors to take advantage of.