Luton Property Investment: 8 Reasons to Invest in Luton Buy to Let

While locations like Liverpool, Manchester, and London will typically enter the minds of property investors, one area you may not have thought about is Luton.

This Bedfordshire town has rapidly increased in popularity over recent years and has quickly cemented itself as one of the best up and coming areas to invest in property.

But why has property investment in Luton become so popular?

There are currently eight popular reasons why so many investors choose to invest in Luton buy to let property.

They are:

1. Affordable Property Prices
2. High House Price Growth
3. Massive Regeneration
4. Excellent Transport Links and Amenities
5. Strong Rental Demand
6. Growing Student Population
7. Robust Business Backbone
8. Strong House Price Forecast

Let’s explore these eight reasons in detail, so you know why so many investors are now choosing Luton property investment in 2023.

When it comes to capital growth, Luton offers a compelling solution for investors looking at southern investments.

According to the latest Land Registry data, Luton buy to let property prices are 9.09% higher than a year prior.

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When looking at the Luton house prices graph, property values lulled during 2020 in Luton, which is something you would expect given the covid-19 pandemic.

However, now in 2023, property prices in Luton have seen a considerable uplift, with prices increasing to £285,944 in March from £268,715 at the same time in 2020.

This growth is especially impressive given the economic pressures caused by Brexit and three national lockdowns during the covid-19 pandemic.

But it’s not just a fluke that property investment in Luton has seen such growth.

In fact, Luton has consistently outperformed London for the last two decades.

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As you can see from the table, Luton has seen house prices rise by 215.66% from 2001 to 2021, while London increased by 4% less.

Likewise, from 2016, Luton prices rose by over 16%, while London saw prices drop by the same amount.

These figures clearly highlight the ongoing strength of the Luton market, with predictions from market experts suggesting this will continue into 2023 and beyond

In both 2018 and 2019, Luton was voted the ultimate London commuter town by estate agents Jackson-Stops.

A big reason behind this is the fantastic transport links on offer.

London Luton Airport is one of the key components of the town’s success and accounts for thousands of jobs.

It also provides international travel to over 18 million people.

Luton is also located right by the M1 and has easy access to both the M25 and the A1 – some of the most used routes in the UK.

Alongside these car routes, Luton features three major train stations, providing access to London in just 22 minutes.

These routes even extend to international travel, with direct train links to St Pancras International, allowing visitors access to the Eurostar journeys to Paris or Brussels.

For residents interested in getting around Luton, the fantastic Luton and Dunstable busway is also here to consider.

This transport link connects areas like Luton, London Luton Airport, Houghton Regis, and Dunstable, with services every seven minutes.

All these transport links make it easy to understand why Luton is considered the ultimate commuter town

While the town of Luton is attracting plenty of young professionals thanks to the employment opportunities on offer, you may be surprised to hear that Luton also has an emerging student population.

The University of Bedfordshire currently attracts around 14,000 students across six separate campuses, one of which is in central Luton.

This campus attracts around 3,200 undergraduates and 1,700 postgraduates to Luton town centre, making the region a hotspot for student property investment in Luton.

As recently as 2019, regeneration work has propelled the Luton student market even further, with a £37 million STEM building and a £46 million library.

If you’re looking for lucrative returns and strong rental demand, investing in purpose-built student accommodation in Luton property investment is a wise idea for 2022 and beyond

While recent capital growth in property investment in Luton has been incredibly high, the future predictions for the town are equally as optimistic.

Savills recently updated their famed house price forecast for the UK market.

Using their latest region predictions, we can estimate how the Luton property market will perform in 2022 and beyond.

Classed in the East of England region for logistical purposes, Savills has predicted Luton’s region will see prices rise by 3% by 2027.

It’s important to note that this prediction is for the entire East of England, with Luton house prices likely to rise far higher than this.

Meanwhile, London will see a negative growth of -1.2% – the lowest prediction in the UK.

This means if you buy a property in Luton in 2023, you could see a capital growth rate of 3% by 2027.

The Luton house price forecast is fascinating, especially when you factor in rental figures, too.

This makes now the perfect time to invest in Luton before house prices rise even further and reduce the potential to earn massive capital gains.

If you want to make the best investment in Luton, it’s essential to research the best areas to invest.

This is because not every area is the same for investment. Some regions generate higher returns and demand from residents.

With this in mind, we’ve made a list of Luton’s best buy to let areas for 2022 and 2023, so you know exactly where to invest.

Keep reading to see the best places to invest in Luton, with the latest house prices Luton offers.

Central Luton – LU1

Avg. House Price: £295,261
Avg. Gross Rental Yield: 3.69%

At Luton’s epicentre, central Luton is a fantastic location for those looking for the best places to invest in Luton.

Containing wards like Dallow, Farley, and South, the LU1 postcode currently offers the most affordable property prices on this list at only £295,261.

Better yet, the region has seen property prices grow by a whopping 56.06% in the last 10 years, according to Zoopla.

There’s a good reason behind this sizeable growth, too.

Not only is LU1 home to the University of Bedfordshire, making student property investment booming, but the region is also blessed with world-class transport links.

London is just 22 minutes away from Luton town centre, with railway connections to Leeds and Sheffield, all the way to Brighton and Gatwick.

While returns are only 3.69% compared to the town’s average gross rental yield of 4.22%, central Luton is a crucial investment hotspot with room to earn far higher returns.

For this reason, LU1 is likely the best place to buy investment property in Luton.

LU2

Avg. House Price: £331,701
Avg. Gross Rental Yield: 3.87%

Another area widely considered one of the best areas to invest in property in Luton is the LU2 postcode.

Home to areas like Crawley, High Town, Round Green, Stopsley, and Wigmore, LU2 is a more affluent Luton area, and this is clearly seen in the property prices.

You can expect average house prices in Luton of almost £330k, significantly higher than 10 years ago

LU2 is also the site of London Luton Airport, which is a massive contributor to employment in the area.

Due to the property prices and rental yields, investment properties in Luton LU2 won’t be available to everyone.

For this reason, LU2 is a Luton area you should avoid as an investor if you don’t have the cash available, but it is still one of the best areas in Luton to live.

LU3

Avg. House Price: £326,923
Avg. Gross Rental Yield: 3.86%

The third area in our list of the best places to buy property in Luton is the LU3 postcode.

Found to the North of Luton, LU3 features Barnfield, Biscot, Bramingham, Limbury, Northwell, Saints, and Sundon Park.

A popular family area, this leafy green region sees average house prices of just £326,923, with its most popular house type being semi-detached houses.

Rental returns here are some of the highest on this list, with average Luton returns of 3.86%.

Meanwhile, property prices have grown in the area by a sizeable 51.49% from 2011 to 2021.

For these reasons, LU3 is one of the best areas to invest in property in Luton.

LU4

Avg. House Price: £313,368
Avg. Gross Rental Yield: 4.22%

The final postcode on our list of the best Luton buy to let areas is LU4.

Found to the west of Luton, LU4 consists of areas like Challney and Lewsey, and is a popular area for commuters thanks to the nearby access to the M1.

Another area considered one of the best areas in Luton to live, LU4 has a bunch of grade-listed buildings, making it a charming part of Luton.

Property prices have increased by over 52% from 2011 to 2021, with rental returns one of the highest on this list at 4.22% in 2023.

However, due to the reasonably sizeable property prices of over £295k, LU1 is still likely the best area in Luton for investment.

That being said, if you’re an investor looking for property and want to find a Luton property for sale, LU4 is an excellent choice.

Dunstable

Avg. House Price: £317,652
Avg. Gross Rental Yield: 3.85%

Although not technically in Luton, Dunstable is a nearby town worth considering when looking at the Luton area.

Found across the M1, Dunstable has a robust commercial backbone with plenty of jobs on offer from Amazon and Superdrug.

Notably, a recent new junction added to the M1, the 11a, has freed up more land in the area.

This leaves the potential for future regeneration in the Dunstable area, with 5,000 new homes already planned for the coming years.

However, while gross rental yields are far higher, it’s NET yields that you should be interested in, with some Luton properties offering incredibly high NET yields.

The Hive, for instance, currently generates NET yields of over 5%.

In the final chapter of our property investment Luton guide, we will look at the latest Luton investment property available from RWinvest.

We will also look at who RWinvest is and whether you should invest with us.

Key Topics:

• Luton Investment Property for Sale
• Who is RWinvest?
• Why Invest With Us?