Assetz® News - Location, location, regeneration

Location, location, regeneration

3rd September 2008 |

For those seeking good places to invest in property, some of the recent economic news may have seemed somewhat gloomy. After all, with interest rates predicted to stay on hold, the chancellor warning that the economy could face its biggest challenge in 60 years and yesterday's housing policy announcements mainly being aimed at first-time buyers, some might wonder where the best prospects, if any, now lie.

The answer is in two markets, according to Andy Smith, the managing director of 1st Asset. He told the organisers of this month's Property Investor Show in London: "In the current market there are two types of areas which will resist price drops: the super-prime, such as London's Chelsea or Kensington which will always be popular and attract buyers immune to the credit crunch, and places which are experiencing change or receiving investment."

He added: "Identifying property hotspots before they are up and coming is difficult. In many cases, by the time the average investor has heard about them, the prices have already risen. It is essential, therefore, that investors are constantly on the look out for infrastructure improvements, regeneration projects and planning applications, before they are announced widely."

This sort of advice may get a few ears pricking up and a few noses to the ground. After all, only the very wealthy investor can consider Chelsea or Knightsbridge. The question, therefore, is where might the next opportunity arise?

Certainly those who looked at places after the cat is out of the bag have often missed out, the show suggested. It stated that Liverpool was a case in point, with many buying after the publicity about it being the European Capital of Culture for 2008 had come out, meaning by then they were buying inflated prices, rather than snapping up property at the start and then watching it rise.

The other English city currently linked with a high profile redevelopment is London, due to host the Olympics in 2012. An Adfero vox pops poll in East London today found that 74 per cent of locals believed it would be good for the capital and help the east of the City. Better transport and new economic benefits were cited as examples, but again the news has been out for some time. On the basis of Mr Smith's point, 2005 may have been the time to buy.

Investors may therefore look around at other possibilities. The Property Investor Show mentioned places benefiting from new public transport developments as one likely prospect, mentioning areas of Kent with enhanced rail links as an example.

On this basis, Manchester may be worth looking at if a forthcoming referendum backs the proposed congestion charge, which will help fund a major public transport expansion. A study earlier in the summer by Manchester Enterprises said the effect on house prices of an extended Metrolink tram system could mean homes gaining an average of £12,000 in value as well as boosting the local economy. If Mr Smith and Manchester Enterprises are both right, a green light from voters in the city region could provide the next new development opportunity.

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