The growth in the size and popularity of London commuter towns has been a notable trend over the years, driven by various factors such as urbanization, improved transport infrastructure, and the desire for a better quality of life. Famously, areas outside London such as Surrey, Kent, and Berkshire, have served as popular residential areas for people who work in the capital city but prefer to live in a more suburban or rural environment. These areas have been informally labeled the “stockbroker belt” of London, which is a general area within a commuter distance surrounding the City and central London.
Factors such as the development and improvement of transportation infrastructure, including railways, roads, and bus networks, has resulted in accelerated growth for a number of commuter towns. Efficient and reliable transport options make it easier for people to commute to and from central London for work, making it both more practical and appealing for people to move to commuting towns. The recent implementation of the Elizabeth line, which opened in May 2022, has had a direct correlation to increase in property prices and investment into towns which are located near the new stations. According to CITY A.M., “Both Reading and Brentwood have seen tenant demand increase by 32 per cent and 26 per cent respectively, with Shenfield also seeing a 25 per cent increase from renters”. This increase in demand has also had knock-on effects, such as attracting more businesses to open in the local area, creating a virtuous cycle of greater desirability through improved local amenities.
According to a Rightmove property expert, asking prices in three Essex locations soared over the last year: Ilford saw a 29.5 per cent rise to £289,426, with Harold Wood prices up 28.9 per cent to £278,167, while Romford, saw a 27.3 per cent rise to an £267,590. Several of Shojin’s development investment opportunities are in commuter towns around London; these include Westbrook Mills (Surrey), Landmark Place (Slough) and Beaufort Court (West Hampstead). These locations along with other towns in the commuter belt which are up and coming, score highly during our due diligence process. The location and connectivity of a town along with the reputation of an area, are all factors which are highly considered before engaging with a new potential development project. For example, Landmark Place, a project we funded 2021, is in Slough town centre, which was recently voted London’s best commuter town by TimeOut.
Rising property prices in central London have led many individuals and families to seek more affordable housing options in the surrounding areas. Commuter towns often offer a better cost of living and a range of housing choices, making them attractive alternatives to living in the city. Commuter towns tend to have features such as green spaces, quieter neighbourhoods, and a more community-oriented atmosphere. People, especially young families, move to these areas to escape the perceived negatives of city life – crime, strained services, high prices -- while still maintaining easy access to urban amenities.
Covid’s impact on flexible work arrangements
Since 2020, the increase in telecommuting and flexible work arrangements has allowed individuals to live farther away from their workplace. As the importance of physical presence in the office diminishes, people are more inclined to choose homes in commuter towns that offer a balance between work and lifestyle.
Efforts to revitalize and regenerate certain areas outside London have made them more attractive to potential residents. These projects often include the development of amenities, infrastructure, and public spaces, enhancing the overall appeal of commuter towns. These regeneration zones, such as Goodmayes, Romford and Meridian Water are seeing substantial investments into transforming older run-down properties, and old industrial areas into beautiful places to live and commute into London from.
These factors make commuter towns an appealing proposition for property investors in the UK. Whether buying a portfolio as a landlord or investing at the development level through a platform such as Shojin, investors can capitalise on rising rental demand and robust house price growth in these areas, despite a softening in the general UK market. The completion of the Elizabeth Line was a strong factor in our recent projects in Romford, Chadwell Heath, Reading and Slough, and our team of experts will continue to look for opportunities where infrastructure projects will unlock future value and drive desirability.