Regeneration areas . . .
I was speaking with a client the other day, and we were discussing his next property investment and got on the subject of lower end areas with massive regeneration programmes in place. He was hesitant about the regeneration area that was in the east side of and commented that it was a bit run down and mentioned there were a few council estates within a half a mile radius. You see when you consider regeneration areas, you allow yourself the investment opportunity to buy really cheap property due to the fact it's a bit run down in today's market. However, if you consider the amount of money to be pumped into the area and how this will improve it in the future, your investment becomes much more appealing.
This happens because:
* Money is being pumped into the area now and will radically improve the overall general perception of the area in the future
* Transport links and new bus routes are put in place
* Road networks are improved to reduce congestion
* New build developments are planned to take place
* New schools and improvement of existing schools
* Improvement of local government buildings such as police stations, fire stations and hospitals
* Creating more social clubs for the youth
* Providing local businesses with grants to promote and create more of their business in the local community
* More shops and local businesses
* More offices.
The above is just the start of what goes on in a typical regeneration programme. I was chatting with Simon about this point, and he shared his experience with regards to regenerated areas.
“One development, in particular, came to mind, back a few years ago Brett and I were selling a development in Elephant and Castle. The development had massively strong property investment fundamentals. The street behind the building was planned for pedestrianization and there were 7 new buildings being built within walking distance over the next 5-10 years. There were millions of pounds worth of re-generation planned over the next 5-10 years!!! The development really had very good solid fundamentals.
I will never forget what two of the clients told me about their separate site visits. The first client, Jenny was coming out of the underground, and there was a massive yellow and blue police sign wanting information about a recent serious assault! Needless to say, she didn't feel safe in the area. The other clients drove down from up north. He said the area looked so ‘dodgy' that he wouldn't let his wife get out of the car. He left her there with the doors locked! He wouldn't even park the car on the street. He parked it in a well lit 24hr petrol station! While looking for the development he saw a man peeing against a building- you guessed it-it was the development we were selling!
Would you have bought one based on those stories?
Well, you may be surprised but both clients did buy in the development. When they worked through their investment research and due-diligence, they realised that good solid fundamentals were so much more important than their personal opinions and current beliefs (and the odd bit of urine).
That was in 2006 and since then the properties have performed unbelievably well and have grown in value despite the serious assaults and urine. The area, well, it looks totally different and still has a long way to go in its regeneration plans.
So to sum up: if you consider that regenerating areas across the country stimulates growth by revitalising and creating an environment which is attractive, vibrant and economically active where people can feel secure, accepted, confident and positive; thus promotes social, community and economic development which does wonders for capital growth.
If you want to know more about regeneration areas, potential growth areas and what's happening in the property market give the team a call on +44 (0)207 923 6100.
Live with passion,