Where should I invest?

A lot of the time, the biggest conundrum in property investment is where is the best place to rent. The location and the economic situation of an area can make or break an investment in some cases as you could have a luxury property in a low-income area where people can’t afford to rent it from you. There are many factors to consider when buying a property, whether you are targeting a specific area to buy in or you are buying close to where you live and want to predict what the market is going to do, research is key when it comes to investing. 

One area to consider could be regeneration zones, which are areas which are seeing investment in infrastructure such as transportation which are meant to encourage economic growth and the lives of the people living there. These zones are targetted where there are high levels of deprivation, high rates of unemployment or no enconomic growth. So by creating new jobs and sometimes gentrifying the area, if successful, the area may be up and coming to be something that investors would like to be a part of. The aim is to invest when the property value is low in the hope that the area will become more desirable from the regeneration, causing the housing market will grow which results in a high turn on investment. Also, regeneration areas are often supported by the government with tax incentives and other ways which they will make it easier to buy property there. However, there is no guarantee that you are investing in a place which will be up and coming as regenerations may be called off or other factors like a high crime rate may put off people coming to the area despite the regeneration. Also, as this is a social change, there is no timescale in which this is to take place. So, you need to look at similar regeneration areas and predict whether it will have the same effect on the one you are looking to invest in. 

Similarly, levelling up agenda is the system of change for the government where they are looking to improve areas by investing in infrastructure and encouraging economic growth. Renters will have a secure path to ownership with the number of first-time buyers increasing in all areas. The Government’s ambition is for the number of not suitable rented homes to have fallen by 50%, with the biggest improvements in the lowest-performing areas. This means that stricter legislation will be phasing out up to half of non-suitable homes for renting which will have a large impact on the housing market as a lot of properties will no longer be edible or you will have to spend a lot to make changes in order to meet stricter legislation. This is great for renters but not for property owners or investors as these changes could lower the value of your property and leave you without a rental income. So, whilst it may be good to invest in property in an area which is levelling up, always look at upcoming legislation to make sure you are not affected by it. 

Another area to look at investing in could be along the HS2 rail developments. High Speed 2 (HS2) is a high-speed railway line currently under construction in England. The HS2 name is planned for services running on the line and beyond. The route will connect London to Handsacre in southern Staffordshire, also linking to Birmingham. The aim of this project is to better connect the country with high-speed transportation, which means that more people can commute to London from further afield. This means that a development such as this would allow you to keep your job in London but live in a rural hamlet outside of the bustle of the city as you would still be able to commute. This means that house prices in areas linked by HS2 are predicted to rise as more people migrate out of the cities where they work into rural areas where their money can buy a much larger property, increasing demand. So investing in areas where HS2 is set to link could be a good investment strategy as the houses there are soon to be more desirable to buyers and renters. Small hamlets with large properties in the countryside are likely to be popular as people would ditch city life for a quieter retreat in the country whilst keeping their jobs in the country.

When buying any property, you should look at surrounding factors such as rates of employment and population growth in the area. Property like many commodities follows the rule of supply and demand, if there is a short supply for something, the demand tends to increase. So, if you are buying into an area with good economic growth and a rising population, the demand for property should increase which in turn will raise prices. This is something to look out for when investing in a-buy-to-let as you should hope to gain a higher rental income in the near future or if you are buying to live there, the property should gain value significantly by the time you are ready to sell. 

Overall, there are many factors and areas to look at when investing in property but the most important thing is to do your research, you should never go in on a whim. Look at similar property prices in the area, economic developments and if any planned regeneration schemes are coming to the area in the near future. We also recommend commissioning a company like Harbour Property to look at this for you as a professional opinion could help you build up a successful property portfolio. 

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