I am sure that when it comes to investing all of us at one point in time have had a ‘what if’ moment.
What if I purchased that stock when it was a little-known company such as Tesla, Netflix, Amazon, or Apple? What if I put my money in Cryptocurrency when it was only a few hundred dollars?
Well, the same applies to property. There have been areas over the last decade where you would have trebled your money. Hackney, Waltham Forrest, Barking, and Lewisham are all areas where you would have made 3 times your original investment if you had invested.
The Beauty of the Property Market
Now, the beauty of the property market over other investment vehicles is that if you invested £50,000 you could have borrowed £150,000. Therefore if you trebled your money, you are actually trebling £200,000 giving you £600,000 from a £50,000 investment. Even after you paid your borrowed money back this would still leave you with £450,000 giving you a 900% return on your invested money.
The Million Dollar Question
Where is the next area that is going to make me that kind of return? To answer that, we have to look at the historical evidence. We need to look at those areas that have had huge increases, what happened in those areas and where is the same thing happening now?
We have analyzed each of the areas and there is a common theme across them all.
- They were all affordable and below the national average to start off with
- They all had improved transportation over a 10-15 year period
- Schools improved in the area
- The neighbouring areas (short walks)had all seen similar growth over the previous 5+ years
- A younger demographic was then attracted to the area with coffee bars, restaurants, etc all coming to the area
As you can see from the above one thing led to another until there was a snowball effect taking place.
So where is this happening now? That is the question everyone wants answering.
First of all is it still happening now? Without a doubt yes it is. Regardless of the investment arena we could wind forward 10-20 years and there would be a stock which we may only just been hearing about now which will be a powerhouse in 20 years time and the same goes for property there is an area now which is going through dramatic change which you have heard of that you will look back on and either wish you had invested or be grateful you did.
Why don’t people invest in these areas more often?
The reality is investors look through their own eyes and invest with varying degrees of emotion. That is that they can’t see past the here and now. This is another reason why most people retire without a suitable pension pot because we think about the here and now rather than what is happening in 40 years’ time.
However, the way someone told me I should think about my pension is that how would you like it if your younger self came in a time machine from the past and gave you a large pot of money to spend. That is your pension.
So when we are investing for the next best area we have to look beyond the here and now, don’t think from your perspective would you live there, don’t look at the surrounding area and think there are no supermarkets, bars, coffee shops or that the area still looks a little run down, that is exactly what you want. All the things above are the icing on the cake which come at the end, we want to get in at the beginning.
So what areas would you recommend?
This is the part where we have to put ourselves on the line.
However, the reality is, when it comes to property it is not actually too difficult to predict this as the property market moves slower than the stock market price-wise so we can already see this happening and just have to take the leap of faith.
We are going to ask the same questions on each of the areas we recommend below
Are there any planned transportation improvements
Are there any planned schools changes
What companies have we seen move to the area
What have the neighbouring areas done
Noma/New Cross – Manchester
We know that HS2 is planned for the area and this is 10-15 years away but again, we should be looking at that knowing how much revenue, jobs, commuters this will bring to the area and jumping on this.
On a more granular level, we have the metro link and we can already see the planned map for 2040. This shows areas that we are recommending now are going to have great links all over the city.
In terms of Noma and New Cross, we know that Ancoats which is just next door has had over £1bn regeneration with property, shops, bars etc all flooding into the area which has pushed up the prices. Also with a basic Google Maps search you can clearly see the distant comparison between the area outlined in red and the area outlined in green.
The area in red is Ancoats which has been hugely regenerated over the last decade and the area in green which is set to go through regeneration.
Liverpool Waters – Liverpool
So this scheme is a perfect example of a decade-long plan and one that will no doubt make huge gains if they build exactly what they say there are going to build. Again like with Manchester we are set to see a dramatic change in the transport structure with HS2 coming into the area along with internal public transport scattered throughout.
The scheme is a £5.1bn scheme that is going to transform the historic dockyards. Ironically they recently lost the heritage status due to this but to keep it they would have to keep it as it is now.
You will find schools, bars, coffee shops moving there and it has already been given the go-ahead that Everton football club will be moving to the area
You can see the before and after shots below.
Ashford – Kent
Ashford is one of those places which has been sitting under the reader for years and I am surprised no one has picked up on it in a big way before now.
The transportation upgrade has already taken place with Ashford International being set up in the mid 1990’s and trains to France in little over an hour and into London in just over 30 minutes.
There is a £250m film studio being developed in the area which has been linked to Netflix and Amazon.
With primary and secondary schools in abundance with good or outstanding ratings it is clear to see why this town can be one of the next best investment areas.
You can see from the map below how close some of the best developments are to the international train station.
Digbeth – Birmingham
Last but not least, Digbeth in Birmingham.
The transportation here is again going through a dramatic change with HS2 coming to the area and being only a 5 min walk away.
Currently, Digbeth is just warming up with a number of developments coming on nicely in the area but over the next 5-7 years we should see great growth opportunities and income-generating investments.
One of the recent headlines stated the following.
Again, great value property which when people catch on, could start to match the main city centre prices.