Inner-city areas 'offer good returns'
Published: 13-Aug-2007
Landlords opting to add to their portfolios with properties located in inner-city areas are enjoying surprisingly good returns, an industry expert has revealed.
Investment Property Databank announced that inner-city areas are traditionally seen as unprofitable for many landlords and property developers.
However, its research suggests that properties in "regeneration areas have outperformed all UK property over the last five years".
Total returns in regeneration areas amounted to 16.7 per cent in the five years to 2006 - compared to 15.1 per cent in the UK in general.
Furthermore, the research highlighted the fact that returns from properties in regeneration areas have been less volatile than those in the country as a whole.
"Residential is potentially a big driver of regeneration, and has seen enhanced capital growth over that seen for residential properties in surrounding counties particularly over the last five years," explained Yolande Barnes, research director at Savills.
English Partnership's head of policy and economics, Steve Carr, added: "These figures confirm unequivocally what we have suspected for a long time – that investors are missing a trick in rejecting regeneration areas because of poor historical performance.
"The figures also indicate that regeneration is working – returning bright, vibrant, sustainable mixed communities to the people who live there, and returning value to investors."
