According to developer SevenCapital, buyers, renters and investors all have something in common: they all want a place that delivers good value, good quality and good amenities.
However, for investors in particular, there’s another element that is equally important and that is future capital growth, the company argues.
The firm says one sure-fire way to try and maximise the potential of a home 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.
Previous research by CBRE revealed that homes close to regeneration zones attract an average 3.6% more price growth per year than properties in the wider local authority area. But where should those whose strategy for 2021 and beyond is investing in areas with the best urban regeneration programmes be looking?
SevenCapital has conducted some research to outline its top five urban regeneration hotspots.
The UK’s second city has undergone a considerable transformation over the past 15-20 years, led by the Big City Plan, which has seen billions ploughed into infrastructure, retail, real estate and the core central area of the city.
Price growth in the city for the past five years stands at 31.2%, while for the last decade it reaches as high as 49.2%.
SevenCapital hails the city – the largest legal hub outside of London – as one of the most exciting buy-to-let hotspots in the UK. The city also has a ‘fantastic record of regeneration’ with millions of investment still in the pipeline, including projects to revamp 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.
Price growth in the last five years stands at 29.9%, while price growth in the past ten years has been nearly 50% (49.2%).
The only location in the South East in SevenCapital’s top five, Slough has long been viewed unfavourably, thanks in large part to an unflattering poem written by Sir John Betjeman and an equally unflattering portrayal in the BBC’s iconic sitcom The Office.
Nevertheless, since work started on Crossrail in 2009, many an investor and Londoner’s attention has been drawn to this ‘now popular commuter town’. As a result, nearly 46% of homes are reportedly let to those leaving the capital.
Slough has approximately £3 billion investment in the pipeline. Its price growth in the past five years stands at 10.4%, while in the last decade it’s been as high as 65.1%, driven by the Crossrail effect.
According to SevenCapital, 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.
As well as its £1.5 billion Spinningfields regeneration project, the city has plenty more in the development pipeline to keep investors interested including an £800 million NOMA project in the north of the city and the Northern Gateway redevelopment – a 155-hectare site north of the city-centre that is set to 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.
The city’s price growth in the past five years sits at 38.2%, while over the past ten years it’s been a whopping 67.6% rise.
The green city, famous for steel, snooker and football, has seen its regeneration largely led by 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 aims to 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!” the SevenCapital team says.
The price growth in the past five years stands at 26.5%, while for the past ten years it reaches up to 44.4%.
“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,” Andy Foote, director at SevenCapital, said.
“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 worthwhile.”
He added: “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 – such as HS2 – and the fact that there is still so much investment and development in the pipeline.”
Foote concluded: “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.”
This post has originally been featured in Property Investor Today.