There’s an overwhelming volume of data available one can analyse. My cheeky hack, knowing as I do that major retailers spend millions of pounds each year analysing where to open their next stores, is to piggyback on this research. But note that different store openings can indicate different things:
- Is an Aldi or Tesco coming soon? Very promising, in particular if you’re after yield as well as growth.
- Is there a Waitrose? A sign of yuppie appeal and a safe place to invest. For example, the first new Waitrose in six years is set to open in Hampton Hill, south west London.
The store opening strategies of all the major supermarkets have changed in favour of local and “express” stores, adding weight to the idea that hotspots are becoming more localised.
If you prefer to do the analysis yourself, look for these tell-tale signs:
Affordability
Areas where property prices are reasonable relative to local incomes have greater room for growth. Think Croydon in 2013 or, better still, its less polished outskirts like Thornton Heath, Selhurst, South Norwood and West Croydon.
Lower pricing attracted more buyers and led to rapid price increases in the following years, though these price rises have since plateaued.
New or improved transport links
Investment in transport connections can transform overlooked towns. Reading is an excellent example, where the Elizabeth Line has made it much more accessible to London commuters, pushing prices up. The new railway station at Cambridge South is another example of connectivity driving local property values.
Job creation
When industries move into new areas, demand for housing grows too. Cambridge North has grown rapidly in desirability thanks to its booming science and tech sector, with businesses moving to get in on the action. Demand for housing has increased as a result.
Quality of life
Access to nature, good schools and a sense of community can also drive housing demand. It’s for these reasons that Hove, once overshadowed by Brighton, has emerged as a popular choice for families and professionals. Early investors have benefited from recognising its potential.
Regeneration projects
Public and private regeneration efforts can breathe new life into an area. King’s Cross and Canada Water in London showcase how investment in housing, public spaces and infrastructure can boost property values, provided growth in demand outpaces new supply.
Good luck, and let me know how you get on in the comments below – or if you have any of your own hotspot tips you’d like to share.