Top 5 Urban Regeneration Hotspots in the UK 2021 (Updated June 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.
Over the years, Derby has become renowned for its manufacturing sector, with this industry alone bringing over 45,000 jobs to the city. As well as housing the Rolls Royce aerospace headquarters, Derby is also home to Toyota and Bombardier Transportation.
Highlighting the potential of this thriving city, multiple regeneration schemes are now underway to expand upon this further. The Derby City Centre Masterplan is at the heart of these regeneration schemes, and will soon be at the root of Derby’s future growth.
Forecasted to complete in 2030, this ambitious project comprises many different elements that aim to deliver a mix of retail, leisure and residential developments across the city. Not With the goal of leveraging £3.5 billion of investment, Derby will see 1,900 new homes and 4,000 additional jobs, as well as a new £20 million hi-tech business park.
Fuelling Derby’s growth, the city’s Local Plan also aims to deliver over 13,000 new residential areas across the entirety of the city by 2028, along with 199 hectares of extra employment land and 100,000 sqm of new office space. In working to position Derby as a city of opportunity and innovation, these regeneration schemes will attract both new demographics and new investors to the city.
As the UK’s nucleus, Derby will benefit further from High Speed 2. This project is arguably one of the biggest transport schemes across the country, and will soon bring Derby within a 52 minute commute to the capital, while Birmingham, Leeds and York will be just 35 minutes or less by rail.
With plans to offer residents increased connectivity, contemporary living options and a plethora of employment opportunities, it’s no surprise that Derby’s population is set to grow exponentially in the coming years. Translating into a rising demand for property, prices across the city are set to increase by up to 24% by 2025, with competitive rental yields sitting between 4.8% and 5% – a prime market for Buy-to-Let investors.
Derby Key Projects
Becketwell Performance Venue
Castleward Urban Village
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 Bracknell has seen a vast array of urban regeneration over the last 10 years or so, largely driven by the demand for living in the town.
Headlined by the completion of The Lexicon, the £770 million ‘Bracknell Vision 2032’ regeneration project is designed to rejuvenate a town that is one of the fastest growing in the South East.
With several phases of redevelopment set to run until 2032, the £770 million ‘Bracknell Vision’ has been kickstarted by the creation of The Lexicon, future redevelopment includes several more public spaces as well as the creation of landmark residential building The Grand Exchange.
This will be closely followed by the redevelopment of Princess Square and The Deck – both completely new spaces that will further enhance Bracknell’s retail offering while providing new public spaces.
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Why is Urban 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 urban 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.