Since 2016, Luton emerged as the top UK buy-to-let property market. The city occupies the top of the index for three consecutive years, with its 3.91% yields, 7.29% capital growth, and 3.7% rental growth.
Why is Luton The Best City to Invest in Buy-to-Let Properties
Below are some of the reasons why Luton is the top UK buy-to-let property market to invest in:
- It is only 22 minutes by direct train from London.
- M25, with its excellent transport rails and infrastructure, is roughly 10 miles away.
- Luton boasts of a £91 million Guided Busway.
- People living in and doing business in Luton has access to more than 23 million people within two hours.
- It is the top UK city for broadband internet connection.
- Luton boasts of eight (8) strategically located mixed development sites that will provide retail, housing, leisure, and employment.
- It offers approximately £1.5 billion investment opportunities.
- It provides 18,500 jobs that will bring in more people looking to rent.
- The Luton Airport is the fastest growing airport that offers 100 destinations across four continents.
- Luton has top-rated schools, with as much as half a billion pounds spent on improving educational facilities.
- Every minute, the Luton local economy contributes £2,000 to the UK economy.
All these reasons make Luton an investment haven, particularly for property investors looking for affordable housing developments in strategic locations. According to Savills, Luton offers the most affordable housing in the main population centres in Bedfordshire, with a median house price to median earnings ratio of 7.5. Luton’s average house price is currently at £239,800, despite its proximity and accessibility to London.
Why Property Investors are Flocking to Luton
Astute investors recognise the potential of the city, and they are putting their money while the property market is still young. While the property prices are still affordable, it is rising at a healthy rate, and it is not showing any signs of slowing down any time soon. In fact, these price increases will go on for the next decade. Investing now would be a wise decision to benefit from substantial equity within a few years. In 2014, Oxford Economics and Rightmove forecasted Luton will experience 41% growth. Actual figures revealed an increase of almost twice at 75%.
Luton, despite the number of developments underway, is still lacking in Objectively Assessed Housing Need. Of all the three main cities that do not have a Housing Infrastructure Fund bid, which they will need to open brownfield sites. It relies heavily on its neighbouring authorities to deliver housing needs.
Luton, along with Central Bedfordshire and North Hertfordshire must increase delivery by 63% to respond to the demand as more new transport investments in the area will likely bring in more people. When Luton delivers even half of this demand, it will remain as the top UK buy-to-let property market for quite some time.