The metamorphosis of Luton
25th February 2017
We are in the midst of securing a site in Luton. Luton seems to have completely been turned on its head. I used to purchase properties there, with no money in my pocket; the properties were bought for £28,000 and then refinanced for £40,000 at 85% loan to value, which meant straight away the deal popped out £34,000 which would cover expenses and allow for some pocket money. The rents was £350 per month and the mortgage only £140 per month. In short you would get £4,000 cash back and then £200 every month.
I did it once and it worked. This wasn’t a good thing, as it’s like a gambler who has his first lucky win, as then five more properties came up on the market as part of a bulk sale, and off the back of the first one I completed on five more again with no funds in the deal, and only cash back out.
The kind of tenants we got for these properties left much to be desired to say the least. One time, as we had heard nothing from one of the tenants after numerous attempts at contact, and no rent was being paid, we drove to Luton and entered the property. There were holes in the walls, cigarette butts had been put out on the carpets and the furniture. And this type of tenant was the typical ‘customer’ these properties would attract. The block itself was poorly looked after as the management company was none existent.
The hassle factor associated with these types of tenants far outweighed what little we were getting in return. One incident wiped out the little profit gained, in terms of the work costs, loss of rent and sheer hassle.
In the end we handed the keys back for all of these properties and moved on. In 2004 Luton was voted as the worst place to live in the UK, it even eclipsed Hull to be in first place. The headline in the Telegrapgh read “Ugly, grey, depressing: why Luton really is the worst place in Britain.”
Fast forward to 2017 and we have a completely different song being sung about the same location.
This Is Money 16th August 2016 reads “Slough and Luton are the new property hotspots as homes rise almost a quarter in a year”.
The Daily Telegraph headlined Luton as “Britain’s most desirable location” on 30th December 2016.
My prejudice, which I held staunchly against Luton for several years, was challenged. I refused to see the transformation from an ugly grey caterpillar to an attractive butterfly.
So why the massive turnaround? One fundamental reason is the death of the £300,000 property in London. This figure is important because it represents the level of purchasing power for an average home.
This has led to people looking outside of London, and Luton has an enviable position, being only 22 minutes away from Kings Cross.
The growth rates in property shows the attraction. Average prices in Luton stand at £256,636 and they have gained a massive £41,702 in just a single year.
It is with this backdrop we have secured a development deal in Luton on a prime site and off market.
Resales and rentals are probably the strongest you will find in the UK.
We are currently seeking an investor for this exciting project. Call the office to find out more.