I’m a great believer in fundamentals when it comes to property investments. You should invest in a place because it has strong fundamentals, not because you like or don’t like it …. or because it’s a nice place to invest.
In fact, nice places are often highly priced and have terrible investment fundamentals.
When it comes to fundamentals Slough is a case in point. It doesn’t have the best reputation. It has a name for being a bit of a dump. Personally I don’t agree. Maybe if you compare it with nearby Windsor I can see what people mean when they knock Slough. But compared with most of London is it really, honestly, that bad?
And the fact is Slough has absolutely fantastic fundamentals as a property investment location.
Let’s look at a few of them:
Slough has a very strong economic base. Remember, a strong economy means a strong jobs market. Lots of jobs means people have money to spend on rent. It often means lots of people moving around for work and who need rented accommodation.
Slough has thousands of employers, some of them very large. 500 businesses and 20,000 people are based on the massive Slough Trading Estate alone.
Research has shown Slough to have the most productive workforce in the country.
Slough has great accessibility. And it’s only going to get better. That makes it a great location for companies to grow and/or relocate. Crossrail is coming in the next few years and there’s also the prospect of a new rail link to Heathrow which will cut the Slough-Heathrow journey to 6 (yes six) minutes.
Heathrow itself is an important contributor to Slough’s economy too. If the new runway goes ahead the demand for accommodation in Slough and the impact of new businesses to support it will be immense.
Slough has a growing population. It’s grown 14% over the last decade and continues to grow. Slough as been accommodating the overspill from London since the 1940s. It’s a popular location amongst migrants arriving in the UK. Again, that means strong demand for rental property.
Slough already has a housing crisis. There’s not enough accommodation to go round. Again, this is a strong fundamental for the rental market. If you’re a landlord here the local council may be able to offer you financial incentives to house local people, or even deal with your lettings for you.
There’s very little room to build new housing, which is good news for anyone who owns property here or is considering buying it. In fact, there’s so little room for new housing that the local authority are even considering ‘borrowing’ a bit of South Buckinghamshire to expand the town.
Slough is still very cheap …. for what is a south eastern location so close to London. The current average property price in Slough is £244,747. So you can invest for half as much as in London. Or, for the price of one investment properties in a ‘good’ London location you could actually buy two investment properties here and diversify your portfolio.
Generally, prospects for price rises in less popular locations aren’t that good. That’s not the case in Slough. Average price in Slough have risen by 20% over the last year according to Land Figures. Forecasts from property consultancy JLL are predicting prices will rise here by 33.6% up until 2020.
Property Insider’s own calculations suggest that you can make a 4% annual yield on an average property in Slough. We’d suspect though that by buying carefully and looking at higher-yielding properties like shared houses or buying properties where you can add value you could make a much better return.
That’s why, if you’re looking for an investment, you really could do much worse than take a look at investing in property in Slough.