When we look across the market, we are increasingly seeing that investors really are turning to commuter towns as a source of good rental yields.
Professionals are increasingly seeing areas such as Salford, Bolton and Oldham as being a great option for commuters into Central Manchester with reasonable prices and great infrastructure and this, in turn, gives investors a superb opportunity.
In a recent survey, it was found that properties in Lancashire have seen their time to sale or rental tumble and is currently well below average and this is a good indicator of a sea change in rental behaviour.
Potential tenants are increasingly looking away from smart city centre glass palaces and towards rather more traditional houses and flats in the suburbs.
Great availability, great returns
What has now become a long-term reverse in London property prices is a massive contrast with what we are consistently seeing in the North West where the area outperforms The Capital in terms of both property price growth and yield.
Certainly, in central Manchester investors have seen the price of suitable rental properties increasing rapidly over the last few years which is great if you already have a portfolio but not so good if you are just starting your portfolio.
In the suburbs and towards more rural areas it is clear that there are bargains to be had.
While for many, prime city centre property is still very desirable, in many city centres, investors have also noted that there is a general lack of availability in terms of resale stock but also with new build opportunities.
Often, suitable brownfield sites have been developed in town and the opportunity to set up a good-sized project is limited.
Indeed, with the new build cost set to soar beyond the £500psqf mark in central Manchester, developers are casting their nets wider and looking beyond the traditional areas for potential sites.
What should you look for when investing in a commuter town?
Great transport links are probably the key here.
If professionals can get into town easily, yet have a house that supports their family lifestyle then that is a winner.
Proof of the pudding can be seen in Lloyds Bank research that showed house prices along newly opened Manchester tram routes increased by an average of 12%.
Canny investors also look for signs of so called ‘gentrification’ with swanky coffee shops and funky bakeries taking over from the former charity shops.
Lendinvest produces an annual report into the best BTL area and it is clear that the best bargains are to be had outside the capital with the top three value areas being Colchester, Stockport and Manchester.
Overall then we see that commuter towns offer big benefits to investors.
The general move out of the city centres means that properties, whether they be rental or buy-to-sell are moving a lot quicker in the suburbs.
The opportunities for flipping are much greater with more reasonably priced buys on the market and better final prices obtained.
For the buy to let investor the potential is in enjoying the best capital growth in the country but also seeing excellent (and growing) rental yields.
For active investors, we certainly feel that turning to a commuter town is a sensible move.