One of the main growth areas recently has been the commuter belt towns around London. These are towns, which have good access to London or other local commercial hubs via the rail transportation system. Ideally the towns should not be more than 1 hour away by train and houses should not be more than £300,000 to buy.
Some of these towns are near major airports like Bishop’s Stortford, which feeds off Stanstead Airport, many airline employees live in the local HMOs and flats. This town is 57 minutes to London Liverpool Street station, so can also attract commuters.
Northern cities offer great returns too, for example, Manchester and Birmingham have recently had a boom in their economies.
What I have found through my research is that Northern towns offer better yields…some are as high as 15% return on investment compared to at best 10% in the South, but the capital growth is generally better in the South. In the Northern cities you can pick up properties in some areas terrace houses for £50,000- £60,000 but these are specialist localities where you need to know your tenant client base and work with good managing agents. The reason for the high yields is due to the very low capital values of the properties.
Coastal towns also offer good yields as the house prices are lower, but you need to be wary of some of these towns as they can lack local investment and cater for majority DSS tenants. With towns such as these there is absolutely nothing wrong from a human angle but from a capital growth basis and tenant end user status for my upscale PRS model it will not work. Coastal towns such as Eastbourne and Hastings work, as there is inward investment and migration coupled with pro-active local councils and PPP (private public partnership ) investments.
The man who has confidence in himself gains the confidence of others
Hasidic Proverb