Luton Buy-to-Let Guide

According to Rightmove, the average property in Luton went for £319,279 over the last year. This is 6% up on the previous year and 13% up on 2020, so Luton property has grown in value in recent years.

The UK House Price Index shows that the average UK property is worth £287,546, less than the current average price for a property for sale.

While Luton property is pricier than the UK average, Luton property evangelists usually look at the town compared to London buy-to-let. According to the UK House Price Index, the average London property price is £527,979, making Luton a much more affordable prospect for people working in the capital.

Discover the rules behind buying rental property with RWinvest’s latest insights and guides!

The Luton Town Centre is a popular place to live in, close to amenities and popular with students. Some of Luton’s cheapest buy-to-let properties for sale can be found in the town centre and inner suburbs, such as Farley. Luton Town Centre is just 22 minutes away from central London by train, so this is a convenient place for commuters to live.

But if you’re looking for more suburban areas for your investment, there are many in-demand residential districts to the east. Some of these are considered more upmarket areas, and this side of town offers good access to Luton Airport. This part of Luton includes places like Crawley, High Town, Round Green, Stopsley, and Wigmore.

To the north, some leafy suburbs are popular with families, such as Briscot, Bramingham, and Sundon Park. In West Luton, you can find areas like Challney and Lewsey. This region is a popular choice for commuters thanks to convenient access to the M1.

Average Property Prices in Farley Hill

£258,781

Average Rental Yield in Farley Hill

4.40%

Average Property Prices in Bramingham

£324,219

Average Rental Yield in Bramingham

4.26%

On average, the most affordable property prices can be found in Luton Town Centre, especially in the inner suburbs. The LU1 postcode offers a gross average rental yield of 3.7%, but it can vary a fair amount depending on the specific area. For example, Farley Hill has cheaper property on average compared to the whole LU1 area and can offer a decent yield of around 4.4%.

Average rental yields can also reach over 4% in well-favoured suburbs such as Challney and Bramingham.

New-build property investment stands out as a highly favoured investment avenue. The allure of newly built developments lies in the minimal maintenance required before sending them to market, making them highly appealing to tenants who can move in at their convenience. Consequently, landlords can earn returns on their investment faster than older properties necessitating renovation.

Last year, the Luton 2040 vision saw a £20 million boost for new housing developments, which could see around 405 new homes introduced to the area. Once completed, the planned development (named ‘The Stage’) is expected to create employment opportunities for local people and support the growth of local businesses.

With ongoing shifts in property market trends, investing in newly developed properties such as this has the potential to result in increased rental growth in the forthcoming years.

Read More: Explore further into this investment trend through our latest buy-to-let guides, with topics ranging from new-builds in Islington to the most current hotspots across the UK!

Luton has many advantages as a buy-to-let location, especially compared to London and other cities. The main reason is that the property is comparatively cheaper, making it more accessible and easier to find more lucrative rental yields.

But overall, northern cities still outperform southern areas when it comes to profitable buy-to-let ventures. Property experts Savills have forecast that the East of England region where Luton is situated is set to grow 19.9% by 2029, while other areas such as the North West are predicted to climb in value 29.4% in the same time frame.

For more information surrounding North West investment, take a look at our recent Warrington Property Investment guide.

Apart from capital growth, Luton also falls short when it comes to rental yields. They may be more attractive than London yields, but compared to major northern cities such as Liverpool (7.77%) and Manchester (9.12%), most properties in Luton can’t compete.

Those looking for a student investment property typically go after cities with larger student populations to ensure consistent demand. Established student cities such as Liverpool boast rental yields of 8.25%, according to a study by Paragon Bank.