We hear a lot about ‘Generation Rent’ in the UK; an increasing amount of younger people unable to get on the property ladder, forced to rent for the foreseeable future and with the recent rise in rents, now priced out of some UK city centres. One smart move if you’re considering investing in the UK market, is to track the movement of where Generation Rent are now choosing to rent.  

One theory is that priced out of city centres, young professionals are now looking to smaller market towns within commutable distances from major UK cities. Writing in Forbes, a market commentator argued that “investing in rental property in small-town markets can provide better long-term returns with less volatility.” If that sounds appealing to you, then read on. 

Of course, smaller market towns may not appear as gentrified as urban city centres and that may take a little more to get your head around as investor, their potential may not be as obvious, or as slick as a more urban location. Instead, you have to think more towards the long-term gain and whether the fundamentals stack up.  

• Does the town or area have an increasing population? 

• Is there evidence of investment in the town? 

• If you were a tenant, would you live there? 

• Does it have good transport connections both road and rail?  

• What other schemes has the developer built in the region? 

A good rule of thumb is tracking the shifting tenant bases of say, former manufacturing towns with aging populations where an influx of young people are moving back to the town, either for jobs in rejuvenated industries or because the town offers them a relatively affordable place to live not far from their centre of employment. 

One such town is Gainsborough, between the UK midland counties of Lincolnshire and Nottinghamshire and identified by the UK government as one of 30 Housing Zones.