Channel 4 had their latest league tables on the best and worst places to live in Great Britain a few weeks ago using measures such as life expectancy, school exam results, numbers of shops, crime levels, bars and restaurants and air quality.
Six out of the top 20 were in Surrey, although top was Edinburgh. In the bottom 20, you had Nottingham high up due to crime levels, and areas such as Hull, Islington in London, and Middlesbrough was number one.
Is this a useful guide for investors?
Well it is useful to see, but the most powerful thing to consistently see with many of the worst areas was the consistently low house prices that had all started to go up greatly, and the huge amounts of regeneration going into the areas. In Middlesbrough alone they are investing millions through the Tees Valley regeneration project .
Clearly as investors this is a great time to buy into a property market ie when it is relatively near the start of the cycle, with momentum building and regeneration going in. These are key indicators to look for in any property market.
I have spoken to several investors who were saying they were pleased to see the level of regeneration going into, Grimsby, for instance and the affordable levels of houses, backing up our thoughts and research.
Remember the choices of where to live and where to invest are completely unrelated. In fact I know a couple of investors who live in Surrey and have large portfolios in Hull, and investors living in Belfast, Edinburgh and Winchester who have their major portfolios in County Durham, Grimsby and Eastern Europe.
They have all been very clear on what they look for when they choose a place to live, and a place to invest!
The most common mistake new investors make is mixing up the two, and choosing an investment based on where they would like to live, and choosing for example a “lifestyle†choice somewhere exotic and sunny which will never make them money and they won’t even be able to go on holiday there as they can’t afford to cover the costs and go on holiday, or a swanky new build apartment and spending thousands on furniture as they could imagine themselves living there when they were younger!
Seems incredible, but too many people do it.
A good investment has nothing to do with discounts, free carpets or a free swimming pool and all to do with basic economics on supply and demand, local affordability and economic changes eg salary increases/decreases, tax changes, and changing lending criteria.
Always keep these thoughts and strategies completely separate, ie where you would like to live and where is a good investment.
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