The buy to let or rental property market is growing exponentially in the UK with a surge of what has been termed ‘generation rent’ entering the market.
Activity in the UK property market reached record breaking levels at the end of 2020, with transactions up by 19% year on year. According to online property portal Rightmove, property prices jumped by 7.3% at the end of 2020 (and are expected to continue to rise by 4% in 2021) with the highest amount of rental viewings recorded for the last six years in September/ October.
While our parents may have taught us that renting was wasted money, that has changed dramatically over the years for a number of reasons. “The newcomers in the market don’t necessarily have the funds to pay the large deposits required to purchase property,” explains Brad Bendall, Group Sales Director at Carrick. “There is also a growing need for these young professionals to be as transient and mobile as possible from a lifestyle perspective. Add to this a massive housing shortage in the UK and we have ‘a perfect storm’ for investors – an under supply and a huge demand.”
This surge of young professionals coming into the market who would rather rent and the enormous growth along the commuter belt as people move out of London, makes for a good investment case. The Carrick Investment Committee has completed diligence on current developments in the hotspots of Slough and Bracknell where massive infrastructure and regeneration projects are underway. “These developments are built in key growth hotspots throughout the UK, in areas that have been identified as having a high demand for apartments for professional tenants, where we expect strong capital appreciation and sustainable rental yields,” explains Bendall.
Despite market conditions changing over time, on average UK property prices double every 15 years, according to the UK Office for National Statistics. “This means that whenever you choose to invest, if you do it with the intention of keeping the property over the long-term you will see price growth, especially when investing in areas with ongoing regeneration projects and sustainable tenant demand,” explains Bendall. “It’s not about timing the market, but rather time in the market.”
Cited by Prime Minister Boris Johnson as the “epicentre of free trade”, Bracknell is the largest tech cluster outside of London. Originally built for 25 000 residents, the town which is growing an average 2.5 times faster than the larger economy, is now home to a population of over 120 000, a number set to grow by 15% by 2036. Nearly 630 000 sq.ft of office space has been subject to residential conversion and luxury new build planning and apartments in the region have already seen prices rise by 30.5% in the last five years according to Zoopla (one of the UK’s leading aggregators of property listings data) and the town is expected to see an 11% increase in property prices over the next five years. The nearly £770 million regeneration plan comprises four phases blending quality residential, commercial, retail and leisure developments with employment opportunities. It’s an extremely well-connected hub for commuters, too – a 24-minute drive to Heathrow and 51 minutes by rail to London’s Paddington station.
The Grand Exchange, which is due for completion in the first quarter of 2023, offers a 24-hour concierge, exclusive on-site facilities including a gym, residents only lounge and co-working space, and secure, gated private parking.
Property consultancy company JLL predicts Slough will see a 17.5% increase in property prices and an 8% rental price growth over the next five years. This thriving commercial town has the largest concentration of global corporate headquarters outside of London and has a long-standing reputation for its enviable employment opportunities. With the second highest start-up rate in the UK relative to its population, Slough is always in demand thanks to the strength of its infrastructure. It is on the Crossrail line, 18 minutes by train to Paddington Station and a 14-minute drive to Heathrow Airport so has massive appeal for commuters (46% of Slough homes are let to London renters). Slough Urban Renewal (SUR) is undergoing a £1.5 billion regeneration project, which is well underway.
The Metalworks is a brand-new build, completed in January 2021. The spacious one and two-bedroom apartments are located in a private, gated development, 100m from Slough’s Crossrail station. “These apartments are larger than anything on the market in Slough for the same or lower prices, so it’s very good value for money. The uptake in terms of the letting of these apartments has been phenomenal,” says Bendall.
Also completed, New Eton House is cash buyer exclusive, with ultra-modern, premium one and two-bedroom apartments. This development is minutes away from the tech hub.
“We’re excited about these developments and the opportunity to partner with SevenCapital as we know exactly what we are getting,” says Bradd Bendall, Carrick Group Sales Director. Seven Capital owns its own construction company which gives them the ability to manage the timelines on the build and manage the build quality. They also offer full management in terms of finding and vetting tenants, managing the lease, doing checks from time to time and replacement tenants and leases.