Top Five Buy-to-Let Locations in the South-East UK
During a time when the global climate is facing unprecedented challenges, investors across the world are likely considering the future of their current and potential investments. For those with a little more time on their hands, or for those that want to maintain a sense of ‘business as usual’, now is the opportune time to re-evaluate your investment strategies and research going forward.
Recent reports by lettings management company Howsy have found that two-bedroom properties are the best investments for Buy-to-Let landlords seeking quality rental yields. At the same time, another report highlights that the South East as a whole is a region with the highest average weekly wage amongst residents outside of London.
With these two key pieces of information, we’ve carried out research into the best areas in the South East for Buy-to-Let investment, based on average wage versus average rental values, cost-to-buy, rental yields and five-year capital growth for a typical two-bed property in each key area.
Here’s the dataset for the top five:
|Location||Median Av. Weekly wage||Av.rent for a 2 bed pcm||Av. Price of a 2 bed||Av. Rental yield||Av. 5 year growth||5 year growth in GBP|
(Figure 1: Data sources: ONS, Property Data)
Home to some of the highest average wages in the country, combined with good rental values, yields and growing house prices, Slough tops the list with a strong performance overall.
Slough’s prime position along the upcoming Crossrail route, where new developments such as Iron House by SevenCapital are already proving popular, is set to revolutionise this already well-connected town in the future. The planned ‘Western Rail Access to Heathrow’ will take this one step further, bringing world-class international links even closer for professionals and commuters alike.
Recently named the best place to work in the UK by Glassdoor for the third year in a row and with a £3 billion high-street regeneration programme in the pipeline, Slough’s future is bright where both tenants and investors are concerned.
Appearing second on the list, Bracknell is a fantastic commuter location with a thriving tech economy – contributing to the highest average wage in our research. Monthly rent and property prices are also higher than average for investors, demonstrating excellent past growth.
Although Bracknell sits slightly further out from London than Slough, it represents the heart of the ‘UK’s Silicon Valley’, with vibrant and ambitious career opportunities to hand, as well as excellent transport links to the capital if needs be.
Bracknell is currently in the midst of a £770 million town centre revamp that is having an incredible effect on tenant demand. With the introduction of The Lexicon – a £240 million retail and leisure destination – alongside a programme of redevelopment planned to run until 2032 and the endorsement of Boris Johnson as ‘the epicentre of global free trade’, there’s no surprise that Bracknell is predicting a 15% population increase by 2036.
While the town is in the early stages of modern Buy-to-Let development, the bar has been set high thanks to developments such as The Grand Exchange. For investors looking for early entry into one of the South East’s most up and coming hotspots, Bracknell is one to watch.
Globally renowned for its unparalleled educational centre, Oxford has long been in demand from both investors and tenants. Average wages are similar to nearby Slough and Milton Keynes while property and rental prices are both the highest in our research. This demonstrates that although growth looks lower compared to Oxford’s contenders, in actual figures it rates much higher.
Not content with resting on its laurels however, Oxford has developed a ‘Strategic Economic Plan’ that will introduce 28,000 new homes, 24,000 new jobs as well as a hotel, new transport interchange and plenty of commercial redevelopment.
For investors that are looking for an asset at the higher end of the market with proven demand, Oxford is a key investment location.
Named twice by Jackson Stops as their top commuter hotspot, Luton offers excellent value with a wage that is comparative to the top three. Affordability is a key draw for both investors and tenants, with lower price points in terms of average rents and property prices.
In terms of transport links, Luton has its own airport, three train stations and sits just 22 minutes from London, making it ideal for the working commuter. Future potential in Luton is also high, with £1.5 billion of investment being funnelled into key development and regeneration projects. This level of redevelopment is a main attraction for investors and a contributor to a predicted 30% growth over the next five years.
For investors that want capital gains and a lower initial entry point, Luton is a great option.
While not technically counted within the South East, Swindon is a similar distance from London to Oxford but comes with a much more affordable price tag. As a location that is definitely at the start of its evolution into a top investment hotspot, Swindon does offer lower average rents than the other locations on this list but has the strongest rental yield of the top five.
With a multi-million pound investment deal with SevenCapital to redevelop its North Star site into a major retail and leisure destination, alongside a £300 million town centre regeneration plan in the pipeline, Swindon is going to see an incredible transformation over the coming years.
If your investment strategy is focused around emerging markets and key regeneration zones, Swindon is one to watch within the South East.
Looking for more information on the South East as a region? Download our brand new Investment Guide dedicated to the South East and the London Commuter Belt, delving deeper into key investment hotspots, the market and the economic performance of the region going forward.