There’s a saying we’re a big fan of here at SevenCapital – it’s not timing the market, it’s time in the market.
While there’s plenty of blogs and think-pieces out there discussing the perfect time to invest in property, the answer is usually the same. The best time to invest was yesterday.
That’s because property, by and large, is a long-term game. While many investors may have found success flipping properties for short gains on capital growth, historically we’ve seen that the ideal method of maximising returns is to invest in a Buy-to-Let over the long-term.
Why? Because not only does a 20-year Buy-to-Let investment have the potential to generate rental returns that can be reinvested but, typically, property prices have doubled every 10 – 15 years or so since 1950.
With this in mind, a high-quality Buy-to-Let investment in the right area can deliver two main income streams over its lifetime, giving you a wider array of flexibility and providing a much easier path to building a property portfolio.
In the following blog we’re going to take a deep dive into Bracknell – one of our emerging locations for Buy-to-Let that is a perfect example of why you should invest for the long-term.
What were prices like in Bracknell 20 years ago?
Located at the heart of the South East, Bracknell is recognised as the home of UK technology but has only recently emerged as a top investment destination.
If we look back at property values in 2001, the average property price in Bracknell was £260,078. Despite this being relatively high for the wider UK at the time, compared to nearby Reading and London, this made Bracknell a much more affordable location that could still command higher rents because of the workforce it could attract.
Taking into account London property prices, which equalled around £411,538 in 2001, Bracknell offered a way of investing in a top London commuter destination without having to break the bank.
So, what are Bracknell prices like today?
Now, if we examine the average price paid for a property in Bracknell over the last 6 months, there’s a huge difference.
Over the last 20 years, Bracknell property prices have risen from £260,000 to £393,000 according to Zoopla.
This in itself demonstrates how property can benefit from a long-term holding pattern.
At the same time we also have to take into account the potential for investors to generate rental returns during this period.
A common strategy for investors is to use the rental returns to pay off the mortgage of a property, which then offers the opportunity to leverage into more properties and a wider portfolio.
In our ‘How to Build an Empire’ guide for example, we examine how £250,000 invested over 5 years can become a portfolio worth £2 million as they mature over the long-term.
Just think – if you’d have invested in Bracknell 20 years ago, you could be well on your way to building a thriving property portfolio.
This is why we say it’s time in the market that matters.
What drove prices in Bracknell over the last 20 years?
While it’s all well and good looking at how the prices have risen, it’s also important to look at why they’ve risen.
Spotting an emerging market can be a great way of choosing an investment location, as we can see from the natural price growth mentioned above.
So what are the key things to look for?
Regeneration is the obvious answer. An easy way of defining regeneration is the building of new amenities – whether that’s residential, commercial, cultural or infrastructural.
Like many towns and cities of its ilk, Bracknell has slowly built up their amenities over the last 20 years or so which has coincided with rising demand.
The biggest of these was The Lexicon – a £240 million retail space that has amplified Bracknell’s footfall while improving the lifestyle the town can offer.
Similarly, improvements to Bracknell train station and the impending Crossrail line have helped Bracknell’s status as a commuter town for London.
While it’s further out of the ‘established’ commuter belt, London renters and buyers are leaving the capital in their droves, effectively expanding the distance London workers are willing to travel for affordable living.
This level of demand then brings another important factor into play – available supply vs demand. Many locations across the UK have been unable to build enough homes to meet demand, which has the knock-on effect of driving property prices up.
As Bracknell continues to build a desirable lifestyle for residents, the disparity between supply and demand is rising.
What does Bracknell’s price growth mean for you?
Hopefully it’s more clear now what we mean by ‘the best time to invest was yesterday’.
As you can see, the improvements that Bracknell has made to its surroundings, the lifestyle and the property market have had an incredible impact on prices, which could have been capitalised on had you invested 20 years ago.
At the same time, there’s still incredible potential in Bracknell – just like any other emerging location.
Bracknell property is currently worth £393,000 but London property has risen to £711,107 – once again highlighting the disparity between ‘regional’ towns in the commuter belt compared to the capital.
And just like 20 years ago, growth is still on the horizon for Bracknell. Savills forecasts suggest that the South East could see price increases of 17% by 2025 – putting average prices at £459,000.
With more redevelopment also planned, there’s nothing to suggest that demand won’t continue to grow. As always, there’s never been a better time to invest.