As London property prices have risen to record levels, many investors as well as homebuyers have become increasingly interested in buying in commuter towns in the wider south east area.
South east commuter towns can offer opportunities for investors. There is usually good tenant and buyer demand from those looking to commute to London. Prospects for capital appreciation are usually good. And, as prices are lower than the capital, it is still possible to find good yields.
In this report we will look at investment prospects in a number of south east commuter towns and current average property values in them.
Our thoughts. Property Insider opinion. Firstly, it’s important to realise that the south east area around London is a large and very varied area. Travel time, not just distance, to London is what is really important to commuters. But apart from that ‘desirability’ varies a great deal too. Some locations are much more sought after by commuters, leading to buoyant property prices and rents. Others are less so, and prices and rents may look something of a bargain, but often do not enjoy the same level of popularity with commuters.
Basingstoke. Once thought of as low cost commuter location, the one-time new town of Basingstoke has a buoyant local property market of its own. Several large company headquarters and easy access to the M3 make it an employment hotspot in its own right.
Travel time to London: 44 minutes.
Brighton. Brighton has come to be regarded as something of an extended London suburb, as commuters have moved in alongside second home owners, retirees and locals, all impacting local property prices. Improved Thameslink services by 2018 are likely to make the city more attractive as a commuter location.
Travel time to London: 51 minutes.
Cambridge. You can read Property Insider’s report on investing in Cambridge here: Cambridge property report.
Travel time to London: 48 minutes.
Colchester. Although 60 miles from London good transport connections and proximity to Stansted Airport have made it popular with commuters. The ONS rates Colchester as one of England’s fastest growing towns, and significant housing development is planned for the area. Local prices still look good value for the south east.
Travel time to London: 51 minutes.
Chelmsford. Is currently one of London’s less well known commuter locations, although recent figures suggest that 15,000 commuters travel into the capital by rail alone every day. Chelsmford ranks highly for new business start-ups and there are plans to develop around 40,000 new homes in the area over the next decade.
Travel time to London: 34 minutes.
Crawley. Originally a new town intended to accommodate 50,000, the population is now around 100,000. A new neighbourhood is now under development and there are plans for further significant housing development. The local economy is closely linked to Gatwick Airport. Local prices still look attractive for a south east location.
Travel time to London: 44 minutes.
Guildford. Guildford is a well established commuter location and consistently scores highly in the ‘best places to live’. It is a commercial centre, home to high profile multinational companies, creating high demand in the local property market.
Travel time to London: 34 minutes.
Luton. Although often dismissed by many commuters as an unfashionable location, low (for the south east) property prices work in Luton’s favour, as does access to the M1 and rail access to the town. New Thameslink services in 2018 and upcoming electrification of the Midland Main line railway will make Luton even more accessible. And don’t forget the town’s airport is the UK’s fifth largest.
Travel time to London: 26 minutes.
Maidstone. Paradoxically, local rail links to the capital were downgraded when the HS1 Channel Tunnel-London rail link opened. This made Maidstone less commutable – with local newspapers reporting cases of some commuters moving as a result. The local property market is driven by those who appreciate its rural yet not isolated location and good area schools.
Travel time to London: 58 minutes.
Milton Keynes. Since being designated a new town in the 60s, to handle overspill from London, Milton Keynes has since proved to be a popular residential location in its own right, growing from a population of approximately 200,000 in 2001 to 240,000 today. A number of areas have been designated for expansion of the town and some estimates suggest 40,000 new homes will be built by 2026, with a possible future doubling of the population. Prices suggest good value for an expanding south east location.
Travel time to London: 35 minutes.
Oxford. You can read Property Insider’s report on investing in Oxford here: Oxford property report.
Travel time to London: 57 minutes.
Reading. Reading is one of the UK’s largest IT hubs and the UK base for a number of multinational companies. The town has undergone extensive housing and commercial development over the last three decades, benefiting from its strategic position alongside the Great Western main line and the M4. Electrification of the main line and connection to the Crossrail network in 2018 are likely to have a significant impact on the property market here.
Travel time to London: 29 minutes.
Slough. You can read Property Insider’s report on investing in Slough here: Slough Property Report.
Finally, a few things to bear in mind when looking to invest in commuter towns:
* Actual travel to work time is more important than distance to London. It can be well worth watching for new, faster transport connections that will make an area more commutable.
* Commuting costs are also very relevant. Most commuters travel by rail so rising rail fares can affect commuter interest in an area. Also consider the quality of service.
* Quality of life is a factor too. Many commuters prefer to live outside London and not simply because prices are lower. School quality and a family environment are highly sought after by family buyers as well as younger couples looking to the future.
* Commuter towns have a local property market too. For example, some have universities or a proliferation of corporate headquarters which also have a direct impact on prices and letting potential.