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Thesis: Doncaster is undervalued


arjunb

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I feel as though Doncaster is undervalued with a great deal of room to grow over the next decade. I'm going to delve into my reasons below.

  1. Inward investment into the town. The town has huge inward investment plans from the likes of Amazon and IKEA. Hundreds of jobs have been created in the local area by massive distribution centres. The importance of such distribution centres to logistics in a post-Brexit Britain cannot be understated. A quick drive through Doncaster shows how much development, including residential property, is happening in the local area. Not only are there enormous distribution centres popping up all over, but also industrial buildings, a shopping centre, and enormous car supermarket and more that I don't know about.
  2. Rail & road connections. This has been Doncaster's party trick for a long time. It remains the best connected town by rail in the United Kingdom and indeed there is a strong rail industry in the area, fuelled by the National College for High Speed Rail's campus. The A1 and M18 provide north-south and east-west connections throughout the country. These connect Doncaster to some of the fastest growing areas in the nation, including Leeds, Sheffield, Nottingham Leicester and London. The town is less than 25 minutes from the M62, connecting it by road to Manchester, Liverpool & Hull. Trains take 30 minutes to reach Leeds and Sheffield, less than 90 minutes to Manchester & Nottingham and less than two hours to London. This means that Doncaster will benefit from the ripple effect of several UK cities. Even in comparison to today's prices, Doncaster is undervalued.
  3. Yields of over 8.5%. Investors from the South, particularly younger ones, are often priced out of their own areas. Doncaster offers investors a fantastic opportunity to build a sustainable second income very quickly. Indeed, I'm sure that other areas of the country provide higher yields, but I feel as though the yield/occupancy trade-off is optimal in Doncaster. A quick search on Rightmove shows properties being let within a month at an average of 9% annual yield, in my experience. Prices haven't yet reached the highs from before the crisis, so one could argue that they still have a room to run.
  4. Affordability. Overall, you can still buy a 3 bedroom house with a garden for less than £80k. You can get a lovely family home for less than £120k & this would promote homeownership in the town long term. Indeed from an investor's perspective, you can still buy a property for £60k within ten minutes walk from the centre of the town. Historically, town centres have the greatest capital growth and occupancy.
  5. Demographics & population. Doncaster has a net inflow of commuters from nearby local authorities. This means that the town attracts people for work and education on a daily basis, a strong indicator of future growth.
  6. Proactive council. The council seems to be receptive to growth and business. Admittedly, this is yet to be seen in full effect, but it's always a bonus!

Would love to see some responses, both arguing for or against my thesis.

Cheers,

Arjun

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  • 2 weeks later...

Hi Adam,

I am new to property investment, you seem like someone who knows what they are talking about, I am currently researching various invest areas, would you be able to point me in a good direction for the say areas where I should be investing that will attract me “good tenants” and also the areas I should avoid due to high crime rates and also attracting me “not the best tenants” , any advice would be much appreciated. Thanks Adam.

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