The beginning of a new year is a great time to reassess your property portfolio’s performance and start researching locations for potential investments for the upcoming 12 months.
While demand for property investment opportunities remains, investors’ strategies have changed in response to the Covid-19 pandemic. Namely, the variety of options now on offer in emerging property hotspots following a shift in buyers and renters’ living habits and lifestyle changes.
As a result, buy-to-let investors have been looking beyond the traditional locations for rental properties and exploring up-and-coming markets that offer strong growth over the coming years.
London has been the destination of choice for many property investors in the past. But, while sub-sectors of the capital’s real estate market have proven profitable over the last two years, buy-to-let investors have increasingly recognised the effect of the pandemic on the lives of tenants, leading landlords to destinations like Redhill in London’s commuter belt.
London’s second-best commuter town
The leafy Surrey town of Redhill was recently named London’s second-best commuter town by property portal YOPA, only beaten by St Albans in Hertfordshire. Boasting a frequent and fast direct train into London – with a journey time of around 30 minutes – and the average property price of £416,944, Redhill has emerged as a popular town for those looking to relocate outside of the capital.
For buyers looking towards London’s commuter belt for their next rental property purchase, it should come as no surprise that housing values in Redhill have increased by 4% over the last 12 months and by 10% since 2018. Value for money is a driving factor behind Redhill’s rise in popularity, offering both buyers and renters a lower entry-level onto the property market.
Interestingly, for those comparing the capital required to invest in Redhill, the average cost of a property is significantly lower than comparable commuter belt hotspots. For example, the average price of a property in neighbouring hotspot Woking is £540,887, £618,676 in St Albans and £711,681 in London’s most established commutable town Sevenoaks.
Redhill offers buy-to-let investors considering adding a commuter belt property to their portfolio a significantly lower level of investment. With housing values in the South East set to rise by 10.4% by 2026, a rental property in Redhill has the potential to increase significantly in value.
£416,944
Average house prices in Redhill are £416,944, a popular town for those looking to relocate outside of the capital
10.0%
Housing values in Redhill have increased by 4% over the last 12 months and by 10% since 2018
£711,681
Price of a property in neighbouring hotspots includes Sevenoaks – £711,681 which is London’s most established commutable town
10.4%
Housing values in the South East set to rise by 10.4% by 2026, a rental property in Redhill has the potential to increase significantly in value
An established location in its own right
Redhill’s impressive connectivity to London and the surrounding areas has turned it into a standout location for buyers and renters. Those considering the town for an investment property will be pleased to hear that it is not just its ability to offer its residents a quick getaway that has helped to put Redhill on the map.
Excellent employment prospects
Redhill’s prime location and excellent transport links have helped it emerge as a prominent business hub in the South East and is home to many multinational companies, including SES Water, Santander Consumer Finance, AXA breakdown assistance, Travelers Insurance, and Aon.
It is also a short, 15-minute drive from Gatwick Airport – one of the country’s largest airports and most significant employers in the area.
Property investors should be encouraged by the impressive employment prospects available in the town, and it is unique position between two of the biggest employment hubs in the South East. As proven time after time, areas that boast excellent job opportunities are most likely to see demand for housing remain strong for the foreseeable future.
Significant regeneration projects
Commuter belt towns like Redhill, which are undergoing rapid regeneration but remain affordable, have emerged as favourites in the eyes of investors, and the reasons for its rising popularity are clear. With values significantly below the capital but rental returns and capital value forecasts markedly stronger, buy-to-let investors have much to gain by expanding their property portfolio to include a rental property in Redhill.
Investment in regeneration projects like Redhill’s£40 million development in Marketfield Way, which comprises a multi-screen cinema and commercial space for restaurants and shops, will revitalise the town centre and enhance its popularity over the long term.
Property investors should also consider investments in infrastructure and connectivity, like the £8.8 million funding boost for improvements to facilities and local services in the wider Reigate & Banstead Borough through the Community Infrastructure Levy (CIL). The investment will deliver several enhancements across the borough and improve the lives of those living in the area in the years to come.
What’s driving rental demand outside of London?
Since the first lockdown in March 2020, an increasing number of people have left London in favour of spacious and more affordable accommodation outside of the capital. As flexible working became the new norm, city workers in their droves swapped their everyday commute to only travelling to work a few days a week. As England’s lockdown restrictions ease and people are asked to return to their offices, the cost of renting in London has rapidly increased. According to data released by Rightmove, London rents are now higher than they were before the pandemic.
Demand remains a sticking point for rising rental costs in the capital, with tenant demand up 32% compared to the same time last year whilst the amount of available stock is 51% lower. Renting in the South East – just outside of the capital – is now 9.8% higher than last year, highlighting the continued demand for housing within an easy commute into the capital.
Rightmove forecasts a 5% rise in rents throughout 2022 as the imbalance between supply and demand continues. For those living in a commutable town outside of London, affordability remains a factor preventing them from moving back to the capital. However, with rental costs rapidly rising, many city workers remain happy to swap a longer commute favouring a better quality of life.
Buy-to-let investors are in an ideal position to capitalise on the demand from this vast pool of renters by offering high-quality rental property. Our latest development, Warwick House in Redhill town centre is a prime example of the type of property investors should consider.
Warwick House, Redhill
When selecting a buy-to-let property investment for our clients, Surrenden Invest conducts a strict due diligence process which includes the points outlined in this feature. Warwick House is an outstanding example of a buy-to-let opportunity in London’s commuter belt. The development contains a selection of 61 studio, one and two-bedroom apartments that will be completed to an exceptionally high standard to appeal to young professionals and city workers.
Housed within a private gated community, Warwick House is located in Redhill’s town centre and is a short walk from the train station, which offers city workers a direct route into London. This outstanding new development ticks all the right boxes for investors and renters alike and will provide the town’s rental market with a luxurious option for prospective tenants.
Available through Surrenden Invest, Warwick House is a fully managed rental property investment in Redhill. For more information about the development, request the brochure today.
