A vibrant student sector, multicultural society and booming economy are just three of the reasons why investors are drawn to the Luton property market. In recent years we have seen some investors cashing in their London property chips as the house price bubble slowly deflates. Recent figures suggest that Luton is one of the beneficiaries of this trend and it is not difficult to see why.
Luton property prices
If we look back to 2016 the average house price in Luton increased by 19.4% in just 12 months, placing it among the best performing property markets in the UK. While there is no doubt the area is benefiting from a degree of disinvestment from the capital this is certainly not the whole picture. There are numerous reasons why property investors are being drawn into Luton as demand for private rental property continues to build.
Further education facilities
Over the last few years we have seen tens of millions of pounds invested into Luton’s University facilities which continue to attract record applicant numbers. This is a trend which is set to strengthen as the local economy continues to grow and diversify. In what could be described as a self-fulfilling prophecy, a growing number of graduates are remaining in the town to begin their working careers. A population which is growing faster than the UK average is also a magnet for business investment, creating more employment opportunities.
Local community
London is seen by many as the pinnacle of multicultural societies across not only the UK but the Western world. This is also a very prominent trend in the Luton area attracting increased business investment thereby prompting strong growth in the economy. At a time when Brexit fever is gripping many parts of the UK, it is refreshing to see a strong local community across the Luton region.
Inward investment
Aside from the tens of millions of pounds poured into the Luton education system the local authorities have been extremely active developing the town and surrounding areas. In 2015 a £1.5 billion development programme was announced which will create in excess of 18,000 new jobs and attract many multinational companies to the area. As we know, inward investment by local authorities has revolutionised some of the U.K.’s larger cities such as Manchester, Birmingham and Leeds and this blueprint is certainly working in Luton.
Growing demand for private rental accommodation
Some large towns and cities depend on student accommodation while others will target the young business market. The fact that Luton has a growing student population and an ever expanding young business market in many ways explains the attractions of the area. Again, in a trend which has been seen across the likes of Birmingham, a successful local economy is prompting more and more graduates to remain in the area. This is therefore limiting new supply to the Luton private rental market prompting property developers and investors to try and fill the void.
Rental yields and capital growth
As we touched on earlier, Luton was one of the best performing regional property markets in the UK in 2016. When you consider the potential for capital growth as well as the relatively strong rental yields it is not difficult to see why investors are flocking to the area. Seen by many as one of London’s more popular commuter districts, with property prices far lower than those in the capital, this is a trend which is likely to continue for some time to come. Demand for luxury new apartments (ranging from one to 3 beds) is growing with new property developments announced on a regular basis.
Conclusion
There is no doubt that Luton’s position as one of the more popular London commuting districts has strengthened in recent times. This has prompted significant growth in demand for private rental accommodation which is also much sought-after by students and graduates. When you also factor in a population which is growing faster than the national average it is not difficult to see increased demand for Luton private rental accommodation in the short to medium term. It is safe to say that the long-term prospects for Luton are also very inviting.