It is an interesting paradox that many Londoners would prefer to live away from the city but would not want to work anywhere else in the UK. A growing number of people with excellent work prospects are also finding that with house affordability levels at record high levels they would be better off living outside the capital in a rental property and commuting to work.
This mindset has opened up a number of decent opportunities for property investors to profit from the exodus, but the chosen location has to be commuter friendly and offer excellent rail or road links in particular, so where should you consider buying a rental property?
The first aspect to consider is that there is a direct link between the distance you travel away from London and the falling price of buying a house which by some industry calculations drops by nearly as much as £1,500.00 for every minute of travel time out of the city of London. This is an average figure but as with all statistics the real story is hidden behind the headline figure and there are certainly cheaper areas within a shorter distance but only because they are not considered to be particularly desirable places to live.
The “Garden of England” as this County is often referred to has a number of popular commuter hotspots which are attractive for differing reasons such as affordability or for more senior executive workers other areas that have excellent schools and more open spaces.
Chatham fits the affordability category with an average journey time of around 36 minutes into London and with house prices that are up to 70% lower than in the Capital, this makes it a great destination for working families on average incomes, meaning that an investor can acquire a highly rentable property for as little as £150K and get an excellent yield as well.
Core commuter areas in places such as Sevenoaks and Tunbridge Wells are very popular but they have price tags that are not much cheaper than many parts of London, but with a little amount of compromise in return for a much lower house price, areas such as Etchingham will tick a lot of desirability and commutability boxes for more executive rental properties that are affordable.
One of the original aspirational destinations outside of London and still just as popular as it is only about a 50 minute journey into London, and despite the obvious lifestyle attractions Cambridge has to offer, house prices are still nearly half of what you would expect to pay in London.
Ely is well worth considering as an alternative but still very attractive rental property destination, with less than an extra 20 minutes added on to the train journey time, you will pay nearly £90,000 less for an average property than you would in Cambridge. There is no shortage of commuters wanting to rent properties in Ely either, so it is well worth considering as an alternative to Cambridge.
The town is undergoing a significant facelift and enjoying a resurgence as a result of investment made in a new railway station, refurbished schools and a thankfully, revamped shopping centre. This has attracted developers to the area in great numbers and there are now plenty of desirable properties at very reasonable prices (150k for a three bedroom new build) that will cement Corby’s position as a great commuter area and therefore making it understandably attractive from an investor’s point of view.
Established as a New Town in 1967 and famous for its roundabouts and concrete cows, Milton Keynes will probably not win many awards when in competition with leafy suburbs and rolling countryside but it is very well laid out and extremely popular with young families. Having excellent school facilities and good road and rail links together with affordable prices, means than Milton Keynes can be considered a good rental property destination with strong demand from prospective tenants, especially when you factor in the current mortgage drought for median salary workers.
There are still plenty of buying opportunities for property investors out there and once you have defined your target market, you will have an opportunity of searching out areas where there is strong rental demand combined with affordable house prices. Looking in the areas that have been highlighted is an excellent starting point and should prove rewarding.
Justin Burns has extensive in the London property sector. He works for PeterBarry.co.uk and he enjoys sharing his insights on property related blogs. For extending a lease North London information, visit the link.