5 Reasons For Buying Investment Property In Doncaster!
Updated: Oct 17, 2018
Doncaster is a historic town in South Yorkshire in the North of England. Traditionally known for its rich industrial heritage, Doncaster has become a major logistics hub with excellent transport links.
With our latest Doncaster development St Peters House selling out in record time, we wanted to highlight 5 of the main reasons why you too should be buying investment property in the town:
1) Price - Low Entry Level - Generally, there seems to be considerable optimism regarding local prospects for capital appreciation. Partly of this is because prices in Doncaster are starting from a very low base, which means there is ample room for growth.
Righmove puts average values for Yorkshire & Humber at £179,977 (January 2018) while recent Land Registry figures estimate average values in Doncaster at just £124,630.
The other key reason for optimism is, of course, the investment now driving economic growth. This has not gone unnoticed by industry commentators:
Halifax, Wakefield, Bradford, and Doncaster, will lead the way in 2018, not just in terms of house price growth but also rental price inflation, making them next year’s buy-to-let hotspots." Estate Agent Today
Doncaster presents a fantastic opportunity for investors to enter the property market during the early stages of growth.
By 2022, Yorkshire is expected to deliver growth of around 17.6%, which is over twice the projected rate in London. It's also more growth than was seen in Yorkshire over the last five years; according to figures published by Zoopla in December 2017, average price gains since 2012 have been just under 16%.
2) Major Investment Projects - Doncaster is currently undergoing huge regeneration with inward investment exceeding £250 million. In addition to this and the Northern Powerhouse funding, huge amounts of private investment is further contributing to the towns growing economy.
"With many regeneration schemes currently taking place, improved infrastructure and the growth of local businesses, Doncaster is increasingly becoming an attractive place to do business." Dan Fell, CEO Doncaster Chamber
Town Centre Redevelopment - £20 million
One of the most visible new developments in Doncaster will be the regeneration of its town centre. The Urban Centre Masterplan sets out a £20 million development framework that will see new investment across a number of key sites.
iPort Doncaster - £500 million
Located in Rossington by junction 3 of the M18 motorway, iPort Doncaster is one of the largest commercial developments in the UK. It will combine high quality warehousing and a 14 hectare rail freight terminal. It connects to the rail network via the original line of the South Yorkshire Joint Railway, and via a purpose-built extension from the East Coast Main Line.
The iPort is already linked to the M18 via another major local investment - the £56m Great Yorkshire Way, which opened in February 2016.
Based less than 5km from the centre of Doncaster, the iPort will ultimately be one of the UK's largest logistics centres. It will comprise 557,000m2 of Grade A logistics warehouses, which will handle rail containers from all major UK ports.
Led by Verdion, the £500 million development is currently under construction but it is already attracting high profile commercial tenants and investors. The site is expected to support around 4,000 jobs when fully operational.
Aero Centre - £1.6 billion over the next 20 years
Aero Centre Yorkshire encompasses a 10 hectare Enterprise Zone and Doncaster Sheffield Airport, one of the country's fastest growing airports.
All told, the 650 hectare site is home to well over a hundred businesses, which take full advantage of the town's outstanding transport links. The site affords ready access to the M1 and M18 motorways, the A1(M) and to Doncaster's rail freight terminal. It is also set close to Britain's largest sea port.
The site's ambitious development plan includes the construction of new hangars, industrial and commercial units, as well as a logistics hub and new facilities for training and education.
The National College for High Speed Rail is a brand new educational centre dedicated to training the UK's next generation of railway engineers. Formally opened by Secretary of State for Education Justine Greening MP, it admitted its first thousand-strong student cohort in September 2017.
The result of a £25 million investment, the College offers specialist training facilities including its own 150m section of track. In January 2018, to underscore its credentials, the College appointed its first chair: Alison Munro, the former Chief Executive of HS2.
"Doncaster has a rich railway history and is today at the forefront of keeping the UK’s rail network moving. The town is already home to more than 20 major rail companies specialising in traction, rolling stock, advanced manufacturing, infrastructure, and power supply and distribution." National College for High Speed Rail
The purpose of the new College is to equip thousands of graduates with the skills to work on HS2 and other high speed infrastructure projects throughout the world. In short, it will establish Doncaster as an international centre of excellence for railway engineering.
3) Employment - As seen above, Doncaster is seeing a wealth of new investment projects that will bring new jobs in the town. Employment estimates have not yet been produced for schemes such as the new National College of High Speed Rail and the Rossington Hall golf destination, but figures have been attached to many other schemes.
Number of new jobs being created:
Amazon's New Distribution Centre: 500
Civic & Cultural Quarter: 100
Yorkshire Wildlife Park Expansion: 300
Lidl's New Distribution Centre: 500
Robin Hood Airport Business Park: 115
Parkside Development: 150
CEVA Logistics Distribution Centre: 200
Aldi Supermarket: 75
4) Rental Prospects - 2017 was not a remarkable year for rental growth in Britain.
Indeed, Rightmove's Rental Price Tracker (December 2017) noted that across the UK, rental prices had grown more slowly than at any time since 2014.
Nevertheless, over the course of the year, rentals in Doncaster rose by a respectable 1.5%. By January 2018, this brought the average monthly payment to £623.
To put this figure in context, the UK average is £909, so there is plenty of room for prices to grow if the local economy is given sufficient stimulus. And fortunately, that stimulus is already taking effect.
As detailed above, a £300 million urban regeneration programme is taking place in the centre of Doncaster. In addition to boosting the economy, this will inevitably create jobs and attract a raft of new, highly skilled professional and technical workers. The implications for rental demand are obvious.
But Doncaster's comparatively low prices have another, crucially important consequence. Current market values are so markedly below those in the South and other regions that
investors can buy up some exceptional properties for a surprisingly modest outlay. That, in turn, translates into very healthy yields.
Absolute rental values might not be breaking any records but yields in central Doncaster are certainly attractive. According to the Buy-to-Let Rental Yield Map 2017/2018 published by
TotallyMoney (based on data provided by Zoopla), yields in Doncaster's DN1 postcode averaged over 6%.
"Part of our work around the town centre is to encourage town centre living and the creation of high quality accommodation." Chris Dungworth, Investment Manager, Business Doncaster
5) The Northern Powerhouse - The Northern Powerhouse has featured in a number of our posts as it is one of the major reasons why so many are now choosing to invest in the north.
The Northern Powerhouse is a Government-backed economic development plan that seeks to rebalance the present pattern of investment in favour of northern towns and cities. The Doncaster and Sheffield City Region is one of the key areas targeted for support. Geographically the region is perfectly placed to become one of the central northern hubs connecting major economies in the north of England with London and the South East
The Powerhouse scheme will facilitate improvements to transport and infrastructure, investment in science and technology, and the devolution of economic development
powers through 'City Deals'.
In summary, Doncaster is a location that we have full confidence in. The town presents a great opportunity for our investors to take advantage of the low entry level prices and high rental yields.
Given the multi-million government and private investment in to the town and surrounding region, there is huge scope for capital growth in the coming years.