Top 10 Tailored Home Investment Hotspots 2010
We all want to know where is best to invest when buying residential property. So the Tailored Home editorial team has highlighted the top destinations worth considering for property investment in 2010.
The residential property market in the UK rebounded from the double-digit price falls witnessed in 2008 in spectacular style last year, with average prices appreciating by around 6%, according to various property price indices.
Many leading residential market experts are torn as to whether prices will rise or fall in 2010, with estimations varying from a 5% annual price rise to a 10% year-on-year decline.
While we accept that increasing unemployment and a weak economy will probably prevent property price growth in many regions of the country, the current shortage of homes and improving consumer sentiment should continue to support overall property price growth. We anticipate an average UK property price rise of 2% in 2010.
Residential property prices in London and the South East are generally expected to experience the greatest level of capital growth. Consequently, the southern part of England dominates our top property investment destinations for 2010. However, many shrewd investors should also look to micro areas of regeneration as well as locations which are set to benefit from the implementation of new transport links.
1) Prime Central London
There was a significant upturn in the residential property market in prime central London during the second half of 2009, fuelled by an influx of foreign investors taking advantage of lower property values and a weak sterling, as well as a significant shortage of properties to satisfy domestic and international demand.
The upturn in the prime London market is expected to continue over the coming months, fuelled partly by the return of hefty city bonuses. This should once again underpin much of the top-end of London’s residential market. Fashionable areas like Belgravia, Mayfair and Knightsbridge among others should see property prices accelerate the fastest across the country.
2) Zone 2 London
Secondary locations in London should benefit from a ripple down from the central London property boom, as well as an ongoing shortage of homes coming onto the market.
There are a number of areas worth considering for residential property investment in Zone 2 London. But we think that the ever-popular North West London – Hampstead, West Hampstead, Swiss Cottage, Camden Town and St John’s Wood - will lead the way in terms of capital appreciation, due to a dearth of residential supply, top-heavy demand and superb 24-hour transport links.
3) Homes Counties
The resilience of the property market in the Home Counties saw the region lead the UK country house market recovery last year, which should continue in 2010.
The Knight Frank Prime Country House Index reveals that the average price of a country house in the Home Counties appreciated by 1.4% year-on-year in 2009, largely due to a major imbalance between supply and demand.
The greatest capital growth should be witnessed at the high end of the market in Home Counties located within close proximity to London, such as Hertfordshire, Essex, Kent, Surrey, Buckinghamshire, Berkshire and Middlesex.
4) Cricklewood and Brent Cross
Planning consent was recently awarded for the £4.5 billion regeneration of Brent Cross and Cricklewood in North West London.
Approved plans for the new Brent Cross/Cricklewood town centre includes the construction of a new mainline rail station, health facilities, parks, open spaces, 7,500 new homes, three schools, and the creation of 27,000 new jobs.
Property prices in the area currently start from around £125,000 which is reasonable by London standards, primarily because the area is not served by the London underground tube service.
5) Birkenhead, Wirral
The £4.5 billion Wirral Waters renewal project at Birkenhead Docks should not be ignored. The regeneration project will lead to the construction of a number of new restaurants, cafes and bars, 13,500 new homes, a hotel and conference centre, and green spaces.
This ambitious investment project, which will be divided into five individual districts, is a significant step in the right direction as far as regenerating Wirral is concerned.
6) Black Wall Reach, Tower Hamlets
Property investors have long been keen on East London as the area is receiving a lot of investment in transport and infrastructure in the run-up to the Olympic Games.
Black Well Heath, located in the London Borough of Tower Hamlets, has plans that should prove sustainable long after the Olympics are over. Around £500 million has been earmarked for the renewal of the area, which will include the construction of between 1,600 and 2,000 new homes, retail and office space, and a new school.
7) Bournemouth
Investors buying property in Bournmouth will probably have to settle for low capital growth in the short to medium term, but can expect to achieve high rental yields, as some of the best rental returns in the UK can be achieved in this coastal resort town, according to Savills estate agent.
The prospects for further rental growth are probably strongest in the lower rental markets, but homes in the lower value tiers of Bournmouth’s property market are likely to show a low level of capital growth over the next few years.
The more expensive homes typically tend to yield a lower rental return, but they do offer greater prospects for capital growth.
8) Telford
Hundreds of new homes will be built as part of a £250 million regeneration project intended to completely transform Telford city centre in Shropshire.
Initial proposals for the project include an extension to the Telford International Centre in a bid to boost the local economy by attracting an additional 200,000 conference visitors each year, which in turn would increase demand for short-term rental accommodation in the area.
Additional proposals include the construction of two new hotels, retail and office space, a new Learning and Media Centre, as well as various leisure facilities.
These plans will kick-start the wider renewal of Telford and the borough and will support other plans to redevelop the town centre.
9) Collegelands, East Glasgow
The housing market in Glasgow has been hit hard by the economic downturn and an oversupply of homes. But an exciting new area is being created in the eastern part of the city, which should have social benefits, help improve the local community, and appeal to some investors.
The £200 million Collegelands regeneration project, which will feature hundreds of new flats, will be built on a derelict site which is ten times the size Hampden Park, Scotland’s national football stadium. Construction work is expected to get underway in February 2010.
10) Market towns in Yorkshire
There are a number of market towns in England, but we have highlighted the property markets in Ripon and Thirsk in North Yorkshire, Wetherby in west Yorkshire and Skipton, the gateway to the Yorkshire Dales, as all being potentially worth a punt. Local roads in or near these areas have been upgraded, significantly reducing the commute to Leeds.
Some estate agents argue that prospects for capital growth in market towns is greater than in cities outside of London, because they are constrained by strong demand and low housing supply due to mass greenbelt land, which is protected by planning and development regulations, which helps to maintain the environment.