Rise of the Commuter Town
As London experiences the first major property price decline since 2009, the spotlight has fallen on the Commuter Belt. Providing all of the amenities with significantly lower living costs, commuter towns are becoming an increasingly popular prospect, for both tenants and investors.
Many commuter towns can see the upwards trends and plan to capitalise. Many key locations are completing regeneration schemes, building a desirable lifestyle to entice potential tenants and workforce talent. From global businesses to huge commercial and infrastructural developments, the chance to succeed has never been higher.
For investors, the commuter belt represents an opportunity. The chance to get in on the ground floor. As each region improves, now is the time to stake a claim.
Why Choose the Commuter Belt?
There are many reasons why the Commuter Belt is such an attractive prospect for people looking to move out of London, whether it’s affordable living, focused employment opportunities or simply a change of pace.
So why head to the Commuter Belt?
Firstly, and most importantly, it’s affordable. With much cheaper property prices, lower cost of living and excellent accessibility, commuter towns generally offer a great fit for those who want a less expensive lifestyle but don’t want to lose opportunities available in London.
Many Commuter Belt towns are ranking well in terms of potential, setting themselves up as excellent investment opportunities thanks to good schools, low unemployment and impressive amenities. These factors are driving tenant demand, providing for young professionals and families that are leaving London.
The Changing Face of the Commuter Belt Commercial Market
Commercially, the Commuter Belt is fast becoming a hotspot for the UK. Slough alone holds the largest trading estate under single ownership, drawing huge clients such as Orange. Reading’s burgeoning creative sector is another success story, taking advantage of a talented workforce available both natively and commuting from the capital.
Several commuter towns are also top destinations for digital clusters. Reading and Basingstoke, in particular, have strong digital and creative economies, forecast to be two of the best performing large economic areas in the UK. Already they both hold a huge percentage of the information businesses in a single area.
Many of these regions play a big part in the ‘tech corridor’ in the South, recognised as areas that drive high levels of productivity.
Crossrail Is Transforming the Commuter Belt
Crossrail represents a unique opportunity for commuter towns. With HS2 aiming to connect London and the Midlands, Crossrail is aiming to do the same for the Commuter Belt and the Capital.
As a major infrastructural project, Crossrail is already having a huge effect on investment and tenant demand among key locations. Since 2009, properties within a mile of a proposed Crossrail station have increased in value by 66%.
This chimes well with research by JLL that measures ‘Crossrail residential rental value growth’. The data suggests rental growth numbers will hit an increase of 14% between 2016 – 2020, which bodes well for the South East stations.
Commuter Belt Residential Trends
In the ‘traditional’ commuter belt, which is located much closer to London, property prices have risen by nearly 313% over 20 years.
At the same time, a second Commuter Belt has emerged, stretching as far as Brighton, Oxford and Basingstoke. As this second commuter belt experiences property growth of 344% over 20 years, it’s become a direct representation of how willing London professionals are to travel to find affordable housing.
Whether this represents a generational shift or is simply a result of the housing crisis is yet to be seen. Most likely it is a mix of both, as younger people look for more affordable option after being priced out of the London property market.
The future of the Commuter Belt looks strong as we enter 2019 and 2020. As Crossrail becomes fully operational, property prices and tenant demand are rising.
Both the ‘traditional’ Commuter Belt and secondary ‘Outer Belt’ will grow in popularity, witnessing increased investment for commercial and infrastructural projects.
The overall success of each commuter town will also rely on London’s outlook. While the capital is expected to stagnate in terms of growth next year, property prices are predicted to rise post leaving the EU.
Key aims of commuter towns will be to ensure a good lifestyle is maintained, providing for both the domestic population and commuters.