Top 5 Urban Regeneration Hotspots in the UK 2021
Investors should always be on the lookout for areas pushing regeneration. More often than not, urban regeneration is a signpost of future growth and demand, resulting in the amenities that attract new residents. As UK property continues to be a popular choice with investors, this is our roundup of the top five urban regeneration hotspots in the UK for 2021.
Every investment location on this list is demonstrating above-average regeneration, transforming themselves into beautiful places to live and work. From the regional cores that are leading the way with long-term masterplans to emerging towns that are spending millions on vital infrastructure, all of these locations are top of the class for property investment in the UK.
If you’re looking for your next Buy-to-Let investment in 2021, look no further.
What is Regeneration?
When we talk about regeneration, we’re thinking about the inwards investment that towns and cities pour into vital sectors. Whether that’s transport, retail, housing, commercial space or even leisure areas, all of these sectors are important for tenants and should be important for you.
Developments such as new train stations, shopping centres, leisure facilities and mixed-use commercial spaces directly provide a better lifestyle, which in turn attracts new residents. This effect can then ripple outwards, attracting new businesses which support a higher-paid workforce and thus, increase demand for residential living nearby.
A great example of regeneration is the Birmingham Big City Plan. What started with the development of the Bullring in 2003 has evolved into a full regeneration masterplan and supported house price growth of 200% over the last 20 years. This redevelopment has completely changed the landscape of the city and turned Birmingham into the leading investment destination in the UK. This is why as an investor, you should be researching urban regeneration hotspots for your next investment location.
As the UK’s second city, Birmingham has seen unprecedented regeneration across its skyline over the last 20 years. What started with the Bullring has only continued, creating new destinations and investment hotspots across the whole city.
Following on from the redevelopment of New Street Station and Grand Central, which has created a new gateway for the city, Birmingham is taking things one step further with the Midlands Metro Expansion. This project will create new connections across the city and has the potential to increase nearby property prices by 6%, nearly £14,000 on average.
At the heart of the city, Paradise continues to get closer to completion, following in the footsteps of Snowhill – the largest speculative office scheme outside of London. With units already leased to PwC, Paradise will join Snowhill as one of the city’s premier office developments and will be a popular stop on the metro line mentioned earlier.
Moving slightly further out of the city-centre, Digbeth is continuing to experience high demand as multiple projects either start or progress throughout the district. The largest of these is Birmingham Smithfield – a £1.5 billion project that will transform large parts of Digbeth into mixed-use office and commercial space, residential units and incredible public areas.
Birmingham Smithfield is set to be one of the largest projects in the country and will revolutionise an emerging market for Birmingham that already draws regular comparisons with Shoreditch in the capital.
Finally, one of Birmingham’s most well-known projects edges closer to completion – High Speed 2. While the benefits of HS2 for Birmingham are too numerous to list here, it’s expected that this new rail line will completely revolutionise the local property market, delivering unprecedented demand from the capital and supporting thousands of new jobs.
As one of the most exciting Buy-to-Let hotspots in the UK, it’s no surprise that Leeds is driving this success through the use of regeneration.
In terms of local economy, Leeds is one of the fastest growing cities in the country and this is having an incredible impact on the population – enticing nearly 10% of those leaving London annually since 2018.
As you’d expect, the regeneration occurring in Leeds is largely centered around new amenities and infrastructure, prioritising the facilities to meet this demand.
One of the major projects is the revamp of Leeds City Station, which is expected to be worth more than £3 million. As a major transport hub for the city, the regeneration will create a new pedestrianised area nearby and completely transform the main concourse, creating a ‘more attractive gateway into the city’.
Similarly, the ‘west end’ of the city is also set to receive a facelift with a new £270 million development. After almost a decade of planning, a developer is now in place to help deliver the 2.8-acre ‘Lisbon Square’ site which will include residential apartments, hotel facilities and mixed-use office space.
It’s expected that ‘Lisbon Square’ will play a major role in helping Leeds double the size of the city-centre and boost the wider city’s economy, while delivering an attractive public space.
Finally, £18.6 million has been secured by Leeds City Council from the ‘Getting Building’ fund, which will be spent on three new regeneration projects. Around £8 million will be spent on transforming City Park in the South Bank, while £7.4 million will go towards redeveloping Temple Green Park and Ride, closely followed by £2.6 million being spent on renovating older homes in the Holbeck area of the city.
Leeds Key Projects
Leeds City Station
Perhaps one of the lesser known locations on this list, Slough continues to impress with a regeneration scheme worth nearly £3 billion. The ‘Heart of Slough’ project is already well underway, transforming large swathes of this town in the London commuter belt.
As a popular destination for London leavers – nearly 46% of homes are let to those leaving the capital – nearly £3 billion of redevelopment has been proposed to revitalise the local housing sector.
Following on from the development of The Curve – a theatre venue and library – plus several leisure and sports facilities (including a beautifully designed ice rink), plans are in place to transform the old Queensmere Shopping Centre into mixed-use residential and office space.
With a site spanning nearly 1 million sq.ft of office space and 500,000 sq.ft of retail units, the proposed plan is mammoth and would truly put Slough on the map.
Across the wider town centre, a number of housing developments are appearing, designed to house the rising population moving to the town. One of these is The Metalworks – a new apartment development that is set to complete Q1 2021.
Within walking distance of Slough train station, it’s expected this development will be the first of its kind in the town, ready to take advantage of the 15% capital growth the town is forecast to experience.
It’s fair to say that Manchester has seen a vast array of regeneration over the last 20 years or so, largely driven by the demand for living in the city.
Headlined by the completion of Spinningfields, a £1.5 billion regeneration project dubbed the ‘Canary Wharf of the North’, the city has plenty more in the development pipeline to keep investors interested.
One of the largest of these plans is the £800 million NOMA project in the north of the city. Led by the Co-Operative group, NOMA is aiming to transform nearly 4 million sq.ft into office, retail and leisure space – with the caveat of doing so in a ‘socially responsible’ manner.
This is followed by the Northern Gateway redevelopment – a 155 hectare site north of the city-centre that will undergo a transformation worth nearly £1 billion. It’s planned that the Northern Gateway redevelopment will create space for new enterprises, leisure facilities and public spaces, as well as providing better transport links.
Finally, Manchester Mayfield is set to be Manchester’s first city-centre public park, integrated into a ‘world-class urban neighbourhood’ that will house both residents and small-to-medium scale independent startups.
Manchester Key Projects
For Sheffield, the main bulk of its regeneration started with The Heart of the City masterplan, which helped regenerate Peace Gardens, the Winter Garden and St Paul’s Tower – the city’s tallest residential building – whilst delivering new restaurants and Grade-A office space.
Since then, footfall has steadily increased, prompting the need for a second project. The £470 million Heart of the City II masterplan, which will focus on the retail sector, will deliver a new destination for the city with ‘long-awaited commercial, leisure, retail and residential focal points’.
The 1.5 million sq.ft redevelopment will transform this area of the city into an agile, mixed-use district designed to bring in new jobs and higher investment. With planning proposals including leisure facilities, quality urban living, public spaces and premium retail units, the aim is to ensure Sheffield can deliver the amenities to meet its growing demand.
It’s expected that this proposal will deliver between 5,000 and 7,000 jobs once it is completed, contributing heavily to the local economy.
The city’s new plans aren’t going unnoticed either – it recently secured a lease with both John Lewis and Radisson Blu – while international law firm CMS is setting up shop in the key office development, Grosvenor House. CMS will join HSBC in occupying the building, demonstrating the global brands and businesses the city’s regeneration is attracting.
Sheffield Key Projects
St Paul’s Tower
Heart of the City II
Why is Regeneration Important for Property Investment?
The profile of the average renter is changing. No longer are young people focused on home buying – many are happy to rent and want to live at the heart of the action, where they can walk to work or grab a drink after a day at the office without travelling.
This has completely changed the view of many Buy-to-Let investors on what their ideal investment looks like. With tenants now prioritising space and flexibility – key benefits that renting can provide – apartments in the city-centre have become popular because of the consistent returns they can offer, as well as the natural price growth that is stimulated by nearby regeneration projects.
Consider this: If you invest in an established investment location, you’ll probably find good returns. On the flip side, you’re likely to pay a little (or a lot, if we consider London) more. Similarly, you may miss out on potential capital growth.
If you invest in an emerging location that has plenty of planned regeneration or nearby amenities, you’ll typically spend less initially and still benefit from the capital growth that occurs naturally over time. This can also result in higher yields, especially if you consider cities such as Birmingham which are relatively affordable but can deliver yields upwards of 5% because of the rapid regeneration it’s experiencing.