East of England to overtake London as property investment hotspot

The East of England has overtaken London as the most attractive region for property investors over the next 12 months, Handelsbanken’s latest annual ‘Property Investor Report’ reveals.

The region – which includes towns like Luton (main picture) in Bedfordshire and includes areas such as Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk – was favoured by more than a quarter (26.5%) of investors, closely followed by North East and Cumbria (24.5%), the North West (22%) and South East (21.5%).

HOTSPOT

Last year, London was the most popular investment hotspot, while this year, it has dropped to fifth position with 21% – on level-pegging with the East Midlands.

Handelsbanken’s report – based on insights from UK property investors with an average of 35 properties each– also reveals eight out of 10 (81%) expect the value of their portfolio to increase over the next 12 months, with nearly a third believing it will grow by more than 20%.

And nearly two thirds (62.5%) of investors plan to grow their portfolio in the year ahead while over a quarter (27.5%) will maintain their portfolio’s current size and less than one ion 10 ( 8.5%) aim to exit the market completely.

The three most in-demand sectors among property investors over the next 12 months are residential flats (63%), commercial offices (62%) – be that for repurposing or to capitalise on top quality assets in prime locations – and residential houses (61.5%).

JEOPARDISING INVESTORS

James Sproule, Handelsbanken UK Chief Economist, says: “While headlines over the coming months are likely to be dominated by the general election, interest rate cuts and the ongoing cost of living crisis, these factors don’t seem to be jeopardising investors’ upbeat mindset.”

He adds: “The adjustments to capital valuations, often masked by inflation, as well as increases to rents, have resulted in property once again delivering a premium over gilt yields – and opened up the potential for attractive opportunities as the economic recovery progresses.”

Andy McCabe, Handelsbanken District Head, East of England, says: “As well as other advantages and opportunities, parts of the East of England region are particularly attractive from a yield perspective, all of which is helping this part of the country to have one of the fastest growing populations and economies in the UK.”