Real Estate Investor Magazine South Africa March/April 2019 | Page 50

UNITED KINGDOM
Why the UK commuter belt is
the next big hotspot
Investors shift out of London
BY TOM HODSON
T
he UK property market has long been popular with
both domestic and international investors, a stable
market that delivers excellent returns. While the an-
chor of the UK market has historically been London - es-
pecially since the recession - increasingly expensive prices,
waning demand and a growing cost of living have meant the
attention of many investors has shifted.
The spotlight is now on the London commuter belt.
Providing easy access to desired amenities with significantly
lower living costs, commuter towns are becoming an
increasingly popular prospect for both tenants and investors.
As London becomes less affordable, more commuter towns
such as Slough and Basingstoke are capitalizing, completing
aspirational, stylish developments and regeneration schemes
to attract tenants, investors and workforce talent.
So as the region continues to improve, why should South
African investors be looking to stake their claim? Why head
to the London Commuter Belt?
Firstly, and most importantly, it’s affordable. With
affordable entry prices, a lower cost of living and excellent
accessibility, commuter towns generally offer a great fit for
those who want a less expensive lifestyle but fast and easy
access to all the opportunities available in London.
The Commuter Belt is also experiencing something
of a renaissance. From Slough to Reading, Basingstoke
to Woolwich, commuter towns are attracting previously
unprecedented levels of inward investment which is helping
them to transform into highly desirable areas, where people
want to live, enjoy and invest in. While London continues to
see declining property prices, certain Commuter Belt locations
are expecting growth of nearly 35% thanks to commercial,
infrastructure and lifestyle-focused redevelopments.
As of 2018, nearly 6.2% of 2,000 London-based respondents
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MARCH/APRIL 2019 SA Real Estate Investor Magazine
to a Grant Thornton survey said they were looking to move
away. If we apply this average to the whole population, that’s
over 520,000 or one in every 16 that are looking for an
alternative. This isn’t just older demographics either. A second
survey focused on teenagers and students found that out of
1,300, a narrow majority would not want to live or work in
London.
Many Commuter Belt towns are ranking well in terms
of potential, setting themselves up as excellent investment
opportunities thanks to good schools, low unemployment and
impressive amenities. These factors are driving tenant demand,
providing for young professionals and families that are leaving
London and importantly, good returns for investors.
According to Wayne Morris, National Business
Development Manager at SevenCapital South Africa,
accessibility is vital to the Commuter Belt’s success. “As the
name suggests, commuter towns such as Slough are proving
increasingly popular with investors because they are ideal
for professionals that want direct transport links to key UK
destinations such as London or Oxford. With generational
developments such as Crossrail completing this year, tenant
demand in these top commuter towns is set to increase
dramatically, boosted by lower travel times and high-capacity
trains.
“One of the largest infrastructure projects in Europe,
Crossrail is already having a huge effect on investment and
tenant demand in top Commuter Belt locations. Since 2009,
properties within a mile of a proposed Crossrail station have
increased in value by 66%. Savvy investors are identifying
the incredible opportunities that these properties can offer,
attracting the people that want to work in London but not
necessarily live there.”