The old adage “location, location, location” will always apply to property as one of the most important considerations whether you’re a homebuyer, renter or investor. All three have something in common – all want a place that delivers good value, good quality and good amenities.
But for investors in particular there’s another element that is equally important and that is future capital growth. One sure-fire way to try and maximise the potential of your property is through investing in a good property in an area which is subject to significant urban regeneration – with plans that are sustainable over the long-term.
Research previously carried out by CBRE discovered that homes close to regeneration zones attract an average 3.6% more price growth per year than properties in the wider local authority area.
So for those whose strategy for 2021 and beyond is investing in areas with the best urban regeneration programs, where should they be looking?
Birmingham has undergone an incredible transformation over the past 15-20 years, led by the Big City Plan, seeing £billions ploughed into infrastructure, retail, real estate and the core central area of the city.
First the Bullring had a complete revamp in the early 2000s, completely transforming the main central area of the city and establishing it as one of the best retail destinations in the UK. Since then the city’s momentum has continued to gather pace – and so have its house prices.
With ongoing major infrastructure projects – notably HS2 and the Midlands Metro Extension in the pipeline, along with the £1.5 billion Smithfield redevelopment and the upcoming 2022 Commonwealth Games, this city still has an abundance of potential still to untap.
Price growth past five years: 31.2%
Price growth past ten years: 49.2%
Currently one of the most exciting buy-to-let hotspots in the UK, Leeds also has a fantastic record of regeneration to thank and with £millions of investment still in the pipeline this city isn’t slowing down anytime soon.
Significant projects include a £3 million revamp of Leeds City Station, and a £270 million, 2.8-acre development in the ‘west end’ of the city – Lisbon Square, which is set to play a major role in doubling the size of the city-centre, providing a mix of residential, hotel and commercial space plus public realm.
With an increased focus on green space as we emerge from the pandemic, its circa £8 million set aside for the transformation of City Park and a further £7.4 million for redeveloping Temple Green Park and Ride are set to intensify the city’s attraction further.
Price growth past five years: 29.9%
Price growth past ten years: 49.2%
The only location in the South East in our top five, Slough was once viewed as an underdog however since work started on Crossrail in 2009 many an investor and Londoner’s attention has been drawn to this now popular commuter town – nearly 46% of homes are reportedly let to those leaving the capital.
With around £3 billion investment in the pipeline, Slough in the coming years is going to see an incredible facelift.
Key projects in the pipeline include a complete transformation of the town centre, including the Queensmere Shopping Centre which will be redesigned to include residential, 1 million sq.ft of office space and 500,000 sq ft of retail.
Whilst price growth over the past five years isn’t as high as the others on this list, with so much in the pipeline, its fantastic proximity to London and better affordability for London leavers, Slough’s prospects are set to continue an upwards trajectory.
Price growth past five years: 10.4%
Price growth past ten years: 65.1%
Manchester has seen a vast array of regeneration over the last 20 years or so which has seen investors flock to the city for affordable investments.
Already counting its £1.5 billion Spinningfields regeneration project, dubbed the ‘Canary Wharf of the North’, the city has plenty more in the development pipeline to keep investors interested.
In the pipeline is an £800 million NOMA project in the north of the city. 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.
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.
Price growth past five years: 38.2%
Price growth past ten years: 67.6%
Sheffield’s major regeneration began largely 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.
Since then, with footfall, and demand increasing, it now has a £470 million Heart of the City II masterplan, which will focus on the retail sector, delivering 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.
Certainly a city to watch!
Price growth past five years: 26.5%
Price growth past ten years: 44.4%
Andy Foote, director at SevenCapital said: “Since London began to lose some of its shine, it’s done wonders in helping to spotlight alternative key towns and cities across the UK, kickstarting numerous significant regeneration and investment programs.
“Whereas once upon a time, most investors’ go-to might have been the capital, now there’s much more choice it can be quite difficult to work out where best to invest your money if you’re looking for the newest ‘hotspot’, because as you can see from our top five, there are multiple locations that would be worthwile.
“What is important however, and which is how SevenCapital identify certain areas, is looking for those areas which have demonstrated sustainable growth over a long period of time, which still have significant regeneration and investment plans in the pipeline.
“Birmingham always take our top spot, not for the highest growth, but for sustainably high growth, its central location and major infrastructure projects – HS2 and the fact that there is still so much investment and development in the pipeline.
“Similarly Slough, whilst its growth has been more modest over recent years, with its major revamp in the pipeline and already great connections to London only set to improve further with the imminent arrival of Crossrail, will continue to be a top choice for London leavers looking for a more affordable lifestyle without compromising on access to the capital.”
For more information on SevenCapital visit www.sevencapital.com.