There is no doubt that property in Nottingham and Luton is attracting interest from property investors for a variety of reasons. Nottingham has one of the fastest-growing property markets in the UK while Luton was recently deemed to be the fourth best area to invest in according to the LendInvest buy-to-let annual index. So why have Nottingham and Luton become so prominent in the UK property market? What are their prospects going forward?
Luton’s growing economy
It is fair to say that Luton has benefited from the high average cost of property in London which has priced many people out of the market. However, to suggest that this is the only reason for interest in the Luton property market would be wrong. There is an array of other factors to consider which include:-
• Comprehensive transport network with ongoing improvements
• Sizeable investment in Luton airport
• New enterprise zone
• Creation of 10,000 new jobs
The Luton airport enterprise zone is one of a number of developments which have changed the face and the prospects of Luton. We are talking about three linked sites of nearly 400 acres of land which will create more than 10,000 jobs. There will also be a knock-on effect to the local economy, increased demand for products and services, not to mention the need for additional accommodation.
Luton LU1 is a completed buy-to-let investment opportunity consisting of 66 studios, one-and-two-bedroom apartments starting from £139,995. Just a 10% deposit is needed and there is a rental yield of 6% guaranteed for 12 months. The apartments are suitable for people working in the centre of Luton as the development is located on the fringe of the city centre. Being just a ten-minute walk from the station, Luton LU1 is also ideal for those working in London as they can get into the city in as little as 40 minutes.
London overspill
As we touched on above, Luton has benefited from the ever increasing cost of London property with many priced out of the market. The average cost of property in London is now in excess of £727,000 against just £261,000 for Luton. This has prompted some homeowners the cash in their London premium and look towards areas such as Luton which is perfect for commuters. House prices in Luton have increased by 13% since 2016 with the population growing at a faster rate than the building of new accommodation. Recent figures show that just 430 homes are being built each year against demand equating to 1400 new homes per annum.
Regenerating Nottingham
The regeneration of Nottingham city centre and surrounding areas has been ongoing for some time. Initially this involved an investment of £250 million to improve accessibility from the south of the city. This regeneration complements the already comprehensive transport network in and around Nottingham. It is a fine balancing act, adding additional accommodation while increasing service and retail capacity. Thankfully the local authorities and property developers have managed to balance this perfectly.
In recent times we’ve also seen the building of a new £30 million bioscience building as Nottingham seeks to become a leader in this field. There is also significant ongoing investment in the upgrading of retail facilities, bars/clubs and fine dining. The cumulative impact of an expanded transport structure, redevelopment of Nottingham city centre and the creation of new employment opportunities will naturally lead to increased demand for accommodation.
Prospects for Nottingham
As we touched on above, Nottingham is one of the fastest-growing cities for house price growth in the UK. Situated in the Midlands, Nottingham has extensive transport links to all regions of the UK and will benefit from the HS2 project via Toton station. Journey times to London will be cut to just 52 minutes and Birmingham to 33 minutes. Often overlooked by property investors, it seems that the potential for long-term capital growth together with attractive rental yields is now turning heads.
As well as year-on-year house price growth of around 7.5% it is worth noting the significant student community which is now in excess of 43,000. This has created exceptional opportunities in the area of student accommodation which is very much on trend at the moment. Official data also shows that Nottingham has a relatively high retention rate for students after they graduate. As a consequence, there will be growing demand for luxury flats from young professionals gaining employment in the city.
Conclusion
The prospects for both Nottingham and Luton are extremely positive going forward due to ongoing regeneration, buoyant employment markets, strong local economies and ongoing improvements in infrastructure. Luton naturally benefits from the London overflow but there is much more to the prospects for Luton going forward. For one we have the huge Luton airport enterprise zone, creating 10,000 jobs, as well as the expansion of Luton airport.
Nottingham will benefit from HS2 and recent investment in the local transport network. As well as a buoyant economy the city also has a significant student community and high retention rates for graduates. The cumulative impact of a growing economy, low unemployment and high graduate retention rates has created strong demand for new accommodation.
Contact One Touch Property today to learn more about buy to let investment opportunities in towns and cities such as Luton and Nottingham.