Historically, London and the South East area have led the charge in property prices, with some London boroughs experiencing 750% + price increases over the last twenty years.
This has always made the capital and attractive proposition for property investors. Domestic and international alike.
There is no doubt that this will also to be the case in the future. However, right now, property price increases in this area have stalled and are, in fact, falling throughout many London boroughs.
According to leading lender, Nationwide, the average price of a London home fell 3.8% to £455,594 in the three months to March, when compared to the same period in 2018.
Some London boroughs have even experienced double-digit percentage price falls over the same period.
This has prompted investors to look elsewhere in a bid to seek and secure a better return on their money.
To this end, most eyes have turned northwards.
At the time of writing, the top 5 property investment hotspots are north of Birmingham. (Source: Property Hub).
Our personal property portfolio has always been focussed on the north-west, spanning from Bolton to Blackpool and surrounding areas.
This has primarily been driven by the fact the we live in the north-west.
However, as time has gone on, and due to our location, we have focussed more and more on the Preston area, even going as far as to target specific boroughs, within Preston.
Preston is not listed in the top 5 property investment hotspots, so why do we believe it represents a great place to invest in property?
The answer lies within a combination of location and local knowledge.
Location, Location, Location
Property investors ideally want to find properties that provide a great return on investment (ROI).
ROI can come in two forms:
- Capital growth.
Our typical London property investor will likely be investing for the former of these two options as we have seen property prices in this area skyrocket in the past.
However, while the south east has historically offered great capital growth, it has been much more difficult for investors to achieve exciting cashflow returns, with ROI languishing in the region of 3% – 4% for a single, family-let property.
Furthermore, as detailed above, capital growth is currently in negative territory.
Meanwhile, in the north of the UK, it is not too difficult to pick up single-let, positive cash-flowing properties that will easily provide an ROI upwards of 8%, due, in no small part, to the fact that we can purchase property relatively cheaply.
Unfortunately, in many northern areas, this cashflow is often not accompanied by exciting capital growth rates, with many areas stagnating due to lack of investment at governmental level.
What we need to do is seek out those areas, where we can buy property for a reasonable price, but that are also in a desirable area and offering the potential for capital growth.
Knowledge is King
One Reason people succeed is that they have knowledge that other people don’t.Tony Robbins
If we can also bring to bear some local knowledge to target the best suburbs to invest in relative to an individuals particular investment strategy, along with information on macro-economic factors that will likely result in future capital growth, we are definitely on to a winner.
Geography & Institutional Investment
Returning to our conundrum of why we believe that Preston represents an excellent opportunity for property investors over the coming months and years and yet it is not featured in the top 5 investment hotspots….
As previously mentioned, most of the top property hotspots are currently in the north of England.
Included within the top 5 however, are Greater Manchester and Liverpool. Preston triangulates nicely between the two and what happens in these two larger city neighbours also washes out to Preston in due course.
Geographically, Preston is almost surrounded by motorways, with the M6, M61, M65 and M55 all bordering the city, providing excellent communication links.
Returning to the macro-economic factors mentioned above, there is a lot happening in and around Preston right now that will positively affect the area for decades to come, as follows:
- University of Central Lancashire Masterplan.
- Preston and Lancashire City Deal.
- Preston Mainline Railway Station Revamp.
Taking each of these in turn.
This is a vision to create an attractive, inviting, world-class campus in line with UCLan’s status as one of the UK’s largest universities.
A core principle of this plan is to integrate the university’s campus seamlessly with the rest of the city, benefitting current and future generations of students, staff, visitors and the wider Preston community.
Developing a skilled workforce, which meets local, national and international needs, is also a central pillar to the UCLan’s development plans. Over the five year lifespan of the project, it is anticipated that there will be £200 million invested, helping to create jobs, kick-start regeneration and attract inward investment into Preston.
Preston and Lancashire City Deal
The Preston and Lancashire City Deal is an agreement between the Government and four local partners; Lancashire County Council, Lancashire Enterprise Partnership, Preston City Council and South Ribble Borough Council.
The deal is a landmark agreement to achieve a once-in-a-lifetime transformation of the area, creating thousands of new jobs and homes.
A total £434m new investment will lead to the expansion and improvement of the transport infrastructure in Preston and South Ribble at an unprecedented rate, enabling a forecast 20,000 new jobs and 17,420 new homes to be created.
It will provide a huge boost to the local economy, which is expected to grow by £1 billion over the next ten years.
Preston Mainline Railway Station Revamp
Virgin trains are spending £1.5 million on a major revamp of Preston’s mainline train station, and a new side entrance is underway in preparation for the HS2 project, which is strongly rumoured to be extended to Preston in the future.
Being the third largest city in the north-west, Preston offers a plethora of property options to suit most investors tastes and budgets.
From apartments and small terraces suitable for single, family-lets, through to large, Georgian buildings, with beautiful architecture, which lend themselves wonderfully to the HMO investor.
Of course, there are many suburbs throughout the city, providing a whole host of property options as well as development opportunities.
Additionally, the many employment areas and the regenerated docks area offer great potential for serviced accommodation.
As property investors, we are constantly looking for that next great opportunity that will provide us with decent cashflow each month, but also give us an asset that is going to appreciate in value over time.
We believe that now is the perfect time to invest in the Preston area.
Property prices are still affordable and often represent great value for money, which will help us to achieve our ROI ambitions.
Meanwhile, all the institutional investment into the area cannot help but make Preston a more attractive place to live in, and to do business in, which inevitably will drive property prices up over the coming years.
Thus, our ‘unicorn’ ambition of great ROI and capital growth will be realised!
If you can see the potential that Preston offers and would like to know more, please click here.
Golden Egg Property Ltd are a Preston based business and are therefore ideally placed to support investors from all areas and walks of life to find their ideal property.