Although prices in London and the South East are expected to experience the greatest level of capital growth, shrewd investors are looking to areas of regeneration and locations that are set to benefit from the implementation of new transport links.

With house prices predicted to rise steadily in 2007, those looking to invest in residential property will want to know how to get the best return on their investment and whathouse.co.uk offers it’s five investment hotspots for 2007.

1) Prime Central London
There was a significant upturn in the residential property market in prime central London during 2006, fuelled by record-breaking city bonuses, foreign investment and a shortage of properties to satisfy demand. Consequently, average residential property prices in prime central London rose by around 27% last year.  

This year, city bonuses should once again underpin much of the top-end of London’s residential market. Fashionable areas like Belgravia, Mayfair and Knightsbridge should see property prices accelerate fastest across the country.

2) Regional London
Secondary locations should benefit from a ripple-down from the central London property boom, while there remains a shortage of properties coming on to the market. Average property prices across London are expected to rise by 8%, according to the Halifax.

There are a number of areas worth considering for residential property investment in London, including:

Hackney - Consider investing in areas that are receiving investment in infrastructure, particularly in the run-up to the Olympics. The Halifax says: “Parts of East London, such as Hackney, are likely to be one of the top house price performers in 2007 as regeneration ahead of the 2012 Olympics attracts buyers.”

Cricklewood and Brent Cross - Initial plans for a new £4-billion town centre, linking Cricklewood to Brent Cross, are currently being drawn up. Plans reportedly include the construction of 7,500 new homes, an extension to Brent Cross Shopping Centre, offices, two schools and a train station. As many as 27,000 new jobs could be created as a result of the 20-year project.

King’s Cross – The area is a rapidly changing part of London, which will be regenerated over the next 20 years. King’s Cross will eventually become the new gateway to London once the Channel Tunnel Rail Link extension opens.

3) Kent
Residential properties in some parts of Kent are likely to record significant capital growth, due to infrastructure improvements, regeneration and the new high-speed Kent rail service, which will significantly cut the journey time to King’s Cross.

Yolande Barnes of Savills Research says: “Run-down Georgian townhouses in Gravesend would be ideal for investing in. The new train running from Ebbsfleet to St Pancras will take just 20 minutes, which will be a huge booster. Folkestone is set to be regenerated and will benefit hugely from a high-speed commuter link. Canterbury will not benefit quite so much time-wise, but will become commutable and therefore a hugely desirable place to live in, and so will see big residential property price rises.”

4) Liverpool
A number of major regeneration projects are currently taking place in Liverpool, as the city prepares to be crowned European Capital of Culture in 2008. The local economy is expected to benefit from further investment this year. Average property prices in the city rose by 9.5% over the past year and currently cost just over £126,000, according to the Land Registry.

The Anfield area is tipped for a potential property boom, which will continue beyond 2008, after Liverpool football club moved one step closer to securing funding for a new football stadium, which will be constructed in Stanley Park and the surrounding area.

The proposed new stadium holds the key to plans for the regeneration of the local community. If the project goes ahead, it will mean new jobs, homes and investment in the area, which should help to boost local residential property prices.

John Berry of local estate agent Sutton Kersh commented: “It seems the Anfield area is showing the classic signs of becoming a hotspot for investing in property.”

5) Rochdale
whathouse.co.uk’s decision to include Rochdale may raise a few eyebrows, but Rochdale town centre will soon undergo its biggest transformation for over thirty years after £100m was pledged to the regeneration of the area. The initial aim is to promote Rochdale’s role as a sub-regional shopping centre, by creating new retail and office space.

Rochdale will appeal to investors looking for property at the cheaper end of the housing ladder. Average residential property prices in Rochdale currently stand at £126,490, following a rise of 9.1% over the past year, according to the Land Registry.

The local housing market is receiving a comprehensive makeover. In the region of 3,500 new homes will be built in Oldham and Rochdale over the next decade, under the government’s housing market renewal programme. A number of new residential properties will also be built along the River Roche.

John Hudson, chief executive of Rochdale Development Agency (RDA), said, “The high quality of some of the residential properties to be built along the riverfront will be of the sort never seen before in Rochdale.”

Rochdale has also built a new £315-million mixed-use business park, which will reportedly create up to 7,000 new jobs.

Anyone who may be interested in buying property in Rochdale should possess a long-term investment strategy, because the Rochdale town centre regeneration project is not scheduled for completion until 2016.

whathouse.co.uk’s advice to anyone looking to invest, whether they choose to invest in one of these recommended hotspots or are considering alternative areas in the UK, is to always undertake thorough research into the property. Consider the area’s transport links, local amenities and any regeneration plans to try and ensure maximum return on investment.