London Commuter Belt Property Investment

A guide on where to invest and how to secure the highest return on investment.

Town Square Invest has compiled everything you need to know about London commuter belt property investment including where to invest, what yields to expect and the best property growth areas outside of the capital.

Why invest in UK property?

There are currently 5 million people living in the UK as private rented sector tenants, which is a higher volume than has ever been seen nationwide.

As homeownership has dwindled from peaks of around threequarters to less than a third in recent years, the volume of Brits becoming private tenants has climbed markedly.

For those looking towards the UK’s property market to generate an income, demand for rental property isn’t going anywhere any time soon with key locations across the country offering investors the opportunity to secure reliable rental returns and strong capital growth potential.

Looking to the year ahead, despite Brexit and the pandemic, Savills forecast that house prices will continue to rise throughout 2021 and expects an average increase of 4% by the end of the year.

In terms of rental growth, the regions have also experienced a rise over the past year of 8% when London is disregarded (HomeLet). Greater London has seen 1.5% rental growth in the year to June 2021 and with little rental gains on offer in the capital, buy to let investors and renters alike are looking towards commuter belt towns and cities for a property that offers better value for money.

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What’s in the guide?

  • Location Guide: Where to Invest
  • Which Asset Class is Best for You
  • Market Fundamentals
  • Why Now is the Time to Invest
  • Learn how to Maximise your ROI
  • UK House Price Forecast
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Location focus: London commuter belt

Why consider London commuter belt
property investment?

London’s commuter belt has emerged as a natural choice for investors and buyers. Areas that boast good transport links and reasonable property prices have become popular for those who wish to work in the city but do not wish to pay the hefty price tag of renting or buying.

Historically London has been one of the world’s most sought-after locations to own property however, given that house price growth has been stagnating in London’s central boroughs, investors could benefit from investing in areas surrounding the capital that offer higher rental returns and stronger growth potential.

For those who are considering looking outside of the capital to maximise their return on investment should consider areas that offer a fast and direct route via train into the capital (look for under 45 minutes journey time). Also, locations on the new Crossrail Train Route including Brentwood will offer investors stronger capital growth potential once the route begins to operate.

The main trend feature that has been attracting waves of London workers and professionals seeking to escape the expensive demands that come with living in the capital. A report from Knight Frank revealed that in 2017, net outward migration from London reached tover 106,000. Moreover, the same report found that Londoners in their 30s were the largest cohort of people leaving the city, with many relocating to commuter belt cities. This is creating pressure for more rental properties, and in turn, creating demand for options provided by buy to let investors.

For buy to let investors, London commuter belt property investments in key commuter towns and cities provide more affordable opportunities and, in turn, lower Stamp Duty obligations.

Why investors and renters are turning
their backs on London

Investment property London commuter belt property provides investors stronger returns than comparable properties in the capital.

The high cost of renting and buying a property in London has contributed to a shift in attitude towards living in the capital, with more people now moving to commuter belt locations that offer better value for money.

For property investors, a similar pattern has emerged. According to Savills, buyers can save an average of £3,000 per minute the further they travel outside of London. Perhaps that is why increasingly volumes of city workers are opting to commute into the Big Smoke for work.

The average house within a 30-minute commute can be purchased for around £485,000 - a much cheaper price tag when compared to the £509,935 London average.

And it is not just prospective buyers who are saving by commuting. Renters are swapping longer commutes in favour of larger rental properties. With houses and flats available for the same amount as one shared room in a house in London, many commuters are reaping the rewards of living outside of the capital.

Best places outside London to invest in property

With the high prices for renting properties in London, it’s no surprise that there has been a trend for people who work in London to live outside of the capital and become commuters. This movement was amplified by the Covid-19 pandemic, where a shift towards a hybrid working from home model has become common place, has seen more people move out of London and into larger, more affordable housing.

While historically London may have been home to impressive rental increases, London commuter belt areas are now welcoming in some of the best rental prices relative to their investment costs.

Quick transport links to London and greater overall affordability have made the commuter belt an attractive investment destination for prospective homebuyers. Essex and Kent are prime examples, with some towns offering exceptional value for money and strong growth potential.

Location can make or break the success of an investment opportunity, with that in mind, here are some of the best places outside of London to invest in property.

Brentwood, Essex

The stunning town of Brentwood in Essex is an affluent area and doesn’t rely on its close proximity to London to attract residents.

The area boasts excellent transport connections to the rest of the UK. Brentwood is just from the M25 Motorway, whilst the A12 provides direct access to Central London – making this pocket of East England a sought-after location. Brentwood Rail Station is in Zone 9 and provides direct access to London Liverpool Street. With an average journey time of 42 minutes, the town is an ideal location for city workers who want to strike a better work-life balance. Brentwood’s appeal to London commuters will rise in the mid-to long-term, as the completion of the section of Crossrail that will service Brentwood will reduce the travel time for commuters.

Buy to let investors attracted to Brentwood will be interested to know that housing values have climbed by 13.3% over the last 5 years (Zoopla). The average price paid in the last 12 months in the Brentwood area was £561,927.

Looking to the future, values in the area are set to rise by 17% in the East of England and offer investors plenty of growth potential.

Rents have also seen a stark rise over the last 12 months, with average rents climbing by 9.6% over the last 12 months (HomeLet).

Chatham, Kent

Located on Kent’s coast, Chatham is a popular waterfront town that has a younger population than the national average. For buy-to-let property investors, Chatham is an exceptional location to achieve high rental returns and strong capital potential.

Over the last 12 months, rental values have increased by 8.1% in the South East region and at a significantly faster rate than the 5.9% UK averaged. Spurred by a rise in demand for rental property outside of London, investors have an opportunity to secure higher than average rental income from their buy to let property.

With millions of pounds worth of investment in the waterfront area plus fast connections into London, there is a real demand for new build property in the area to cater to the demand for housing.

When it comes to the all-important value of property in Chatham, prices have increased by over 12% over the past 5 years (Zoopla). Buy to let investors will be interested to know that average property prices are set to climb by 17% in the South East region by 2025, meaning that there is room for growth and ideal for investors seeking capital growth potential.

Given the £650 million regeneration and a 20-year regeneration programme in Chatham Waters to upgrade the waterfront, including the construction of new builds and commercial units, this commuter belt property hotspot is likely to remain a top target for investors.

Diversify your portfolio and invest in a fully managed,
income producing UK property

Our selection of UK buy-to- let properties offer reliable rental assurances,
so you will know exactly how much income you will generate.

Chatham Waters

Residential apartments in Kent

Residential apartments in Kent

  • 6% NET assured for 2 years
  • Strong capital growth potential
  • Prime city centre location
View Investment

Library House

Residential apartments in Brentwood

Residential apartments in Brentwood

  • 1 & 2 bedroom apartments
  • London commuter belt location
  • Completed and fully managed
View Investment
7% NET yield
Realistic and reliable rental assurances for up to 5 years.
Ideal for UK and
overseas investors
Low entry level properties, ideal for portfolio diversification.
Prime locations
with high demand
All developments are located in popular UK university towns and cities.
Fully managed and furnished student apartments.

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Our team has over 50 years of experience working in the UK property industry and knows how to select opportunities that provide real growth potential.