If you asked 10 different property investors how they find up-and-coming housing markets they would likely give you an array of different answers based broadly around the same variables. Each one will tweak their strategies to suit their own requirements but on the whole there are some central themes which run through up-and-coming housing markets. So, how do you spot an up-and-coming housing market and invest before the crowd?
Thriving nearby towns
It may seem a little strange to suggest that up-and-coming housing markets may be situated near thriving towns but that is most certainly the case. What you tend to find is that thriving areas see property prices pushed to levels which are in the end unaffordable for the masses. As this happens, investors begin to widen their search into the surrounding areas. Hopefully, they will land in the neighbourhood you have earmarked for investment often seeing “better value for money”.
Infrastructure projects are one of the strongest indications that an area is up-and-coming and thriving. If you take a step back and look at this from a distance, if millions of pounds are being invested in infrastructure projects then the local authorities, national government and business leaders must see great potential. As areas become more accessible, due to better transport links, so demand for housing increases and prices rise. Then the vicious circle of upward pricing pressure starts….
The word gentrification may mean many things to many different people but in its most simple form it is the introduction of more upmarket services to an area. For example, areas which are up-and-coming will attract new fashionable businesses perhaps in the shape of new food halls and coffee shops. These services are often focused on trendsetters, encouraging more and more people to consider the region as their future home. Increased demand will put pressure on prices and inevitably prompt the building of more homes.
Strong education facilities
Fashions and trends change in all areas of life including property investment but some elements stay constant. One element of a strong property market which is often overlooked is significant ongoing improvements in education facilities. Local authorities and education services are well aware that in order to attract couples and families to an area there needs to be a relatively high level of education available. After all, for many families education is one of the most important reasons to move lock stock and barrel to another part of the country.
We’ve also seen many surveys over the years which show that house prices in the vicinity of high-level education facilities tend to be valued well above the average for the area. Do not underestimate the power of education!
Central to any buoyant property market is a buoyant local economy and employment sector. For many people this can prompt significant renovations to their homes to upgrade and increase the value. Just as some investors use the “crane index” to monitor the relative prosperity of a region so some investors will use the amount of skips and scaffolding on show to measure growing prosperity and long-term investment into housing. While it all sounds very simple and straightforward, staying ahead of the game is the trick, investing your pounds before others follow suit and push prices higher.