For many investors the capital has lost its shine, high prices and low yields are deterring would-be buyers who are now looking for alternative nearby options that have good transport connections, such as these Top 5 London commuter towns for investment.
Each year tens of thousands of home movers leave London and the pandemic only pushed these figures higher.
Whilst home working will likely be a large part of many roles moving forward, for at least part of the week the reality is there will be some requirement to be in the office meaning good transport connections are paramount.
Renters leaving London are largely not looking to move too far, shrewd investors are turning their attentions to commuter towns for their next investment for higher growth potential and rental yields.
Below we’re revealing what we believe to be the top 5 London commuter towns every investor should be considering…
1. Brentwood, Essex
Train travel time to London: Around 40 minutes
Brentwood is an established commuter belt town in Essex that is known to be a popular place to live in the county, not least for its excellent transport connections.
As well as being in Zone 9 and offering direct transport connections to London Liverpool Street, Brentwood is also just a 40-minute drive from Stansted, London City and Southend Airport.
The Elizabeth Line (Crossrail) will stop at Shenfield Station in Brentwood, when the route opens it will be served by 12 trains per hour and the journey will take just 45 minutes to central London.
Brentwood is one of a collection of commuter towns in Essex that are particularly sought after, nearby Chigwell, Ingatestone and Loughton are also desirable places to live, supporting the potential for price growth in the locality.
Over the past 5 years, property prices in Brentwood have risen by 17.3%, according to Zoopla and the outlook for Essex property prices is strong with predictions for the South East region the latest Savills forecast expecting prices in the region to rise by a further 17% by 2025.
Brentwood has excellent transport connections that are set to further improve with the arrival of Crossrail, the local road network is equally as impressive. Brentwood is close to the A12, A127 and the M25 motorway meaning residents can easily connect to the wider road network.
Not only is Brentwood an excellent place to live for commuters but it also has a buoyant local economy that offers well-paid jobs. Industries that are most active in the local area include automotive, defence, aerospace, innovation, and R&D.
Brentwood has a low unemployment rate, multiple well-regarded schools, excellent amenities, and many green spaces, all making this commuter town an incredibly popular place to live with tenants and homeowners alike. Brentwood’s population is steadily increasing year on year as more people move to the area, by 2035 it is expected that almost 90,000 people will live in the town.
2. Watford, Hertfordshire
Train travel time to London: Around 20 minutes
Watford in Hertfordshire boasts excellent transport connections with the capital, few commuter towns offer such a fast route, with the fastest route taking just 20 minutes into London Euston.
The town’s connections by road are also great with the M1 and M25 motorways nearby.
There’s a lot in the pipeline for Watford with regeneration plans in motion or in the planning stages. Collectively the major regeneration and infrastructure schemes represent a joint public and private sector investment of over £1.5billion in the coming decade.
Historically Watford is on a positive trajectory with strong and steady price growth which is indicative of the outlook; over the past 5 years, property prices have risen by 13.2%. Average buy-to-let property yields in Watford are strong, especially when compared to those in London.
Offering a perfect combination of factors, Watford is increasingly a popular place for businesses to be based. Together with being exceptionally well connected, not just with London but the wider South East region, Watford is known to have a skilled and qualified population and strong business community.
Watford is a successful business centre and is the location where many large companies have offices including KPMG, JD Weatherspoon, Majestic Wine, Ralph Lauren, Costco and Wickes.
As well as a thriving economy, Watford offers residents an excellent quality of life. The town has three theatres, is the home to the BBC Concert Orchestra and has a premier league football club. Families are drawn to the town for the excellent schooling options including two grammar schools and it also has 12 Green Flag parks, with Cassiobury Park often ranked to be one of the best parks in the UK.
As commuter locations go, Watford offers an incredibly fast connection to London Euston and is also a wonderful place to live, creating an idyllic work-life balance. With the retail, leisure and culture on offer, it’s of little surprise that Watford is regularly reported to be the happiest place in Hertfordshire.
3. Milton Keynes, Buckinghamshire
Train travel time to London: Around 35 minutes
Milton Keynes is a place investors should have on their radars, with a population of over 230,000 that is reported to have grown by 15% over the past 15 years, the demand for housing is strong. Some reports have even suggested that Milton Keynes population could double over the next 30 years.
Location is an incredibly important factor and whilst its train and road connections to London are excellent, Milton Keynes is also very well connected to a number of important business hubs.
The local economy is largely based on logistics and services meaning its connectivity to so many other centres strengthens its prospects. Birmingham, Oxford, Cambridge and Leicester are all as easy to reach as London from Milton Keynes.
Where many areas have seen a slight dip or plateau in price growth over the past 12 months during the pandemic, Milton Keynes property prices have continued to grow, by almost 4%. Over the past 5 years, prices in Milton Keynes have grown by just under 15%.
Amongst the many businesses based in Milton Keynes, Red Bull’s Formula One team are based out of the Red Bull Technology Campus on the outskirts of the town. Other notable employers include the Open University has a 48-hectare campus and headquarters in the town. Santander has its UK headquarters in Milton Keynes and Network Rail employ thousands of staff at their National Centre in the town. Whilst the transport connections are impressive but there are also excellent employment opportunities in the area.
As a place to live, Milton Keynes is hugely appealing to professionals and families alike. The town is two fifths green space, a far greater proportion than most towns across the country meaning residents enjoy multiple green spaces. The vision for Milton Keynes was for it to be a ‘forest city’ and over 22 million trees and shrubs have been planted across the area. There are over 6,000 acres of parkland, rivers, lakes and woodland. The town attracts visitors from neighbouring areas for the many activities on offer including water sports, fishing, walking and horse-riding – there are around 100 miles of bridleways and pathways in Milton Keynes.
The modern town centre mall and Xscape is not only a great place for shopping but is also the location of Europe’s largest indoor ski slope. The town also has two IMAX cinemas. In terms of amenities and facilities, Milton Keynes stands out amongst other commuter towns.
It’s been recorded that around 13 people move to Milton Keynes every single day, with this level of demand for property and the trajectory for the local population, investors are wise to consider Milton Keynes when looking for their next rental property.
4. Newbury, Berkshire
Train travel time to London: Around 40 minutes
Newbury in Berkshire is one of the UK’s largest towns and is an important centre for businesses and regional transport. With the train from Newbury reaching London Paddington in just 40 minutes, Newbury is well connected to the capital making it an ideal place for both daily commuters and those who need to commute irregularly. By road, Newbury is just a short distance from the M4 motorway for access to the wider road network.
One of the most prosperous of all the home counties that surround London, Berkshire has a thriving regional economy and is home to many tech companies. More than 600 tech-sector start-up companies launch in Berkshire each year. Newbury is home to Vodafone and Hitachi amongst many other big names.
An established and prestigious area, Berkshire is a small county to the west of London and is an incredibly desirable place to live. Windsor and Eaton, both in Berkshire, are home to some of the most sought after addresses in the UK, and of course, the British Royal family reside in Windsor Castle. A short distance from Newbury, nearby Reading has seen stupendous growth over recent years with the local tech industry booming and the expected arrival of Crossrail. Newbury is following a similar upward trajectory with the growing local economy and rising population numbers.
Notably, Newbury was recently singled out as one of the top locations for investors as one of the European Cities of the Future according to research that highlighted the town’s business potential.
As a place to live Newbury appeals to both young professionals and families, with excellent commuting options and superb quality of life on offer. The countryside is on the doorstep for outdoor adventures, there is a broad selection of shops and amenities and there are many good schools in the town. There is a busy social scene with bars and restaurants in the centre of the town and many groups and community events are run year-round.
In terms of price growth, according to Zoopla, property prices in Newbury have risen by 14% over the past 5 years. As demand for properties in the area continues to rise, prices to are expected to continue upwards.
5. Luton, Bedfordshire
Train travel time to London: Around 25 minutes
Luton in Bedfordshire is located just 30 miles north of London and is a commuter town that buy-to-let investors should be considering.
Luton’s excellent transport connections include fast links to London by train, easy access to the motorway network and of course Luton Airport is on the doorstep.
The University of Bedfordshire is located in Luton and has around 15,000 students in attendance per annum, many of whom choose to live in Luton once they’re graduated.
With low entry prices and continued strong price growth, Zoopla report around 17% price growth over the past 5 years, Luton has strong prospects for capital appreciation and increasing rental yields over the coming years.
Young professionals are drawn to Luton for the many employment opportunities. Due to its status as a commuter town and the local infrastructure increasing numbers of businesses have chosen to move operations to the town over recent years.
Luton’s local economy is robust, several household names call the town their home including Vauxhall Motors, EasyJet and Astra Zeneca. From The Butterfield Technology Park and neighbouring Innovation Centre and Business Base around 100 businesses operate. Luton’s economy is varied with many different industries operating from the town from engineering, pharmaceuticals, aviation and automotive.
Increasing numbers of people are choosing to live in Luton, of course, the transport connections are one appealing factor, but it also has much to offer as a place to live. The town has a huge range of activities on offer from the trampoline park and sports village which includes a 50-meter swimming pool to the Stockwood Park Discovery Centre, an interactive museum. The Mall is the home of around 100 shops and places to eat and also has a kids club and soft play. The area boasts many exceptional schools catering to children of all ages, adding to the appeal for families.
With low property prices, high demand, a strong economic setting and many features that make the town appealing to tenants, Luton should absolutely be on investors radars in 2022.
Investing in a London commuter town
The dynamics of locations that are ripe for investment, especially London commuter towns can be changeable based on announcements of new projects, continued regeneration, improvements to infrastructure and shifts in economic and population trends.
Price growth and rental yields, the existing figures and the forecasts are also closely examined to determine the top buy-to-let investment hotspots.
The team at Thirlmere Deacon are also watching for the best places to invest, and for developments that are the right quality to appeal to the desired tenants.
Get in touch to learn about the investment locations you should be considering.
