We are pleased to announce that we have secured an outstanding new investment property in Retford, Nottinghamshire. Like any development that we bring to our customers’ attention, it exhibits all the key strengths that we would typically seek: an excellent specification, a good match with local market demands, and the potential to see strong returns in terms of both rental income and long-term capital growth.

However, the purpose of this blog is not to describe the property or the investment opportunity itself – you can read about those elsewhere. Here, we’d like to explain why we believe that Retford is such a good choice for property investors this year. In so doing, we also aim to highlight the factors that we consider and the sort of research that we conduct behind the scenes before we ever propose a new opportunity to our clients.

Retford: an Introduction

East Retford is an ancient and relatively small market town in Nottinghamshire. It is largely surrounded by farmland, and it is home to a wealth of historic buildings, many dating back to the Georgian era. Its centrepiece is an attractive market square but it also hosts theatres, parks, elegant churches, a museum and an art gallery.

In short, it’s a relaxed, rather genteel neighbourhood, and one that is increasingly establishing itself as a desirable residential address. A little over a year ago, in October 2021, Rightmove noted that Retford had seen some of the UK’s fastest rates of capital growth. It noted that average values here had risen by +19% year-on-year, a figure surpassed only by Toxteth in Merseyside.

We’ll review more recent market data later in this article but, first, it is worth considering what has been driving the town’s rising popularity.

Location

Despite its rural air, Retford makes a convenient and enviable base for commuters. It is located less than three and a half miles east of the A1, a major highway that, less than seven miles to the northwest, becomes the A1(M) motorway. Consequently, motorists can count on rapid connections to major centres of employment such as Worksop, Doncaster and Lincoln or, a little further out, the bustling cities of Sheffield and Nottingham.

The town also has its own railway station on the East Coast Main Line and handles services by LNER, Hull Trains and Northern. It therefore offers ready connections to key regional and national destinations, including Hull, Leeds, Bradford, Sheffield, Nottingham and London Kings Cross.

We have written before about the enduring popularity and economic success of Doncaster and the recently renamed “South Yorkshire Mayoral Combined Authority” (formerly Sheffield City Region.) Both have been attracting huge amounts of inward investment and generating thousands of new jobs. So too have Nottingham and Derby, as we previously pointed out in our respective area investment guides. However, not everyone who comes to take jobs in these nearby cities will want to live in their urban centres. For those who prefer a quieter, calmer pace, outlying towns and villages have a decided appeal.

Much the same is true of visiting professionals, contractors, business delegates and academics; the bigger cities may be generating the bulk of the major regeneration projects and job opportunities, but for those making shorter-term visits and seeking respite from busy working lives, smaller satellite towns can be very attractive.

Investors with residential and short-stay properties in Retford have not been slow to capitalise on this growing demand for good quality accommodation. In recent years, the town has benefited from an influx of seasonal visitors, contractors and other temporary workers. Consequently, while the assured shorthold tenancy (AST) market is likely to remain very rewarding, shorter-stay developments and serviced accommodation have the potential to be especially profitable.

Commuting Distances to Urban Centres

Worksop 7 miles 11.5km

Doncaster 15.5 miles 25km

Lincoln 18 miles 29km

Rotherham 18.5 miles 30km

Chesterfield 20 miles 33km

Sheffield 22 miles 35km

Nottingham 26 miles 43km

Derby 35 miles 56km

Local Economic Indicators

The local authority responsible for Retford is Bassetlaw District Council, which is pursuing plans to revitalise the town by making improvements to the centre, its transport infrastructure and its various leisure, entertainment and cultural amenities. It is also managing a programme to enhance the post-pandemic retail recovery through its High Street Enhancement Support programme.

Additionally, however, the town is set within an area that is being energised by other local and regional projects. For example, neighbouring Worksop has a Town Centre Masterplan that will drive “significant investment by the Council and its partners in education, training and business space.” By 2040, it aims to define and support a more vibrant retail core, facilitate more work-related training for residents, introduce more sustainable travel options and support the creation of new flood defences. More generally, multimillion-pound improvements to transport infrastructure and the wider tourist offering should be of benefit to the region as a whole.

At that more regional level, the local economic partnership for Derbyshire and Nottinghamshire, known as D2N2, is helping to shape regeneration and inward investment. It has a Recovery and Growth Strategy that aims to accelerate the pace of economic growth in the wake of the Covid pandemic. Another multimillion-pound programme, it encompasses several key propositions including:

· Boosting productivity by bringing together education, innovation and business support systems

· Supporting low-carbon growth

· Supporting digital connectivity, enabling “fast digital access everywhere”

Moreover, the LEP sets out some key aspirations in its Vision 2030 document, which include:

· Creating 39,000 new jobs by 2030

· Securing up to £9 billion in added value in the D2N2 economy, growing the total to £70bn

· Reaching the top 25% in Europe for productivity

· Raising average earnings

· Investing £257million in transport infrastructure and other capital schemes

· Support a move towards employment in higher-value sectors such as life sciences, advanced manufacturing, creative, digital and professional business services

All this work, by such a multiplicity of agencies, is inevitably helping to boost prospects for growth in business, employment and, thus, demand for both long- and short-term accommodation.

Demand for Property

As in many parts of Britain, demand for housing outstrips supply across much of Bassetlaw District Council’s territory. Its Housing Strategy document notes that by 2026, the Council is aiming to see “an increase of new homes built: introducing new development methods to meet the housing shortfall as outlined in the Bassetlaw Plan.” It also wants to drive “a significant improvement in standards in the private rented sector.”

The Council notes that the UK government requires “10,013 homes to be built in Bassetlaw by 2037” and “allocation of land dedicated for future employment, which will help to create 11,800 new jobs.” More details can be found in the draft Bassetlaw Local Plan.

Although the borough’s house-building rates have recently been good, the Council highlights a number of pressures that could support a continuing imbalance between demand and supply. In particular, it notes that key challenges for housing in Bassetlaw include:

· High demand for family accommodation and two bedroomed bungalows across all areas

· More homes needed to assist existing council tenants (who are subject to an under-occupation benefit shortfall) to downsize

· Affordability constraints rule out home-ownership for many, placing greater pressure on renting in both the private and social housing sector

· The significant increase in the ageing population is generating a need for specialist accommodation across Bassetlaw

· Giving employers confidence that there are adequate levels of good quality housing available to attract the right employees, thereby helping to attract investment and support the creation of jobs

Against this background, it seems likely that in Retford and its surrounds, the shortfall of supply will continue to exert an upward pressure on property prices and average rental values. That bodes well for investors, of course, and as we’ll discuss later on, it follows what seems to be a well-established trend.

The Visitor Market

Local demand for short-stay tenants is not only driven by visiting workers, contractors and academics. Retford has its own visitor economy, and caters for tourists who come in search of heritage, culture and a unique market town experience. Others come for the nearby fishing lakes, or for a host of other venues and pursuits. Examples include:

· Markets, farm shops and garden centres

· Spa treatments

· Sports – golf, tennis, cricket clubs etc.

· Bassetlaw Museum

· Pilgrims Gallery

· The Majestic Theatre

· The Pottery Art Centre

· North Notts Lit Fest

· Paramotor training

· Gamston Flying School

· Water-skiing & boating

· Clumber Park Forge & Dam (landmark)

· National Trust Clumber Park

· Creswell Crags

· Idle Valley Nature Reserve

· Daneshill Lakes Nature Reserve

· Sundown Adventure Land (theme park)

In addition, Retford is set within open countryside and is close to excellent walking country, while the Lincolnshire Wolds AONB are located only 30 miles to the east. This all helps to make the town an attractive short-stay destination for tourist visitors, adding to its investment appeal.

Property Market Data

Despite its heady (+19%) rate of growth last year and further growth in 2022, average values in Retford are still affordable by national standards. According to figures published by Zoopla, the average local property price stood at £222,233 in December. That compares against a UK average of £261,600 as reported in the agency’s November House Price Index.

Zoopla’s Index doesn’t provide price-growth data at a very local level but it ranks nearby Nottingham top in the UK for capital gains. It reported a year-on-year increase of +10.5% in the city, which compares against a UK mean of +7.8%. In the same document, it records growth of +8.5% in neighbouring Sheffield.

Rental data from LiveYield suggests that conventional AST properties in Retford have produced average yields of 4.6%, which is respectable if unremarkable by national standards. However, this figure encompasses returns from a significant proportion of older housing stock, and newer properties may be expected to perform significantly better. Moreover, given that there is a marked under-supply of accommodation in the short-stay market, rental values and yields may be expected to be better still.

Summary

For property investors, Retford has some obvious attractions. Demand is strong, supply is short and despite record growth last year, average prices are still low enough to make good yields a realistic possibility.

The town itself is benefiting from the regeneration of its centre, its transport infrastructure and its retail offering. So too is neighbouring Worksop, whose proximity to Retford means that its effects on the local market should not be ignored. Ongoing job creation should help to attract new workers to the borough – a trend for which the local council is already making preparations – while a continuing shortage of good accommodation looks set to maintain upward pressure on prices.

Since the advent of the Covid pandemic, UK-based staycations have grown in popularity and, in recent years, holiday properties in many regions have ranked amongst the country’s most rewarding asset classes. Given the wealth of visitor attractions in and around Bassetlaw, demand for short-stay rented property seems set to grow.

In conclusion, despite the challenges presented by global inflationary pressures and a faltering UK economy, Retford still exhibits many of the signs that investors will typically seek: affordable prices, an excess of demand, a good record of rental growth and a credible prospect of longer-term capital appreciation. Rapid capital growth is unlikely to be seen anywhere in the UK over the course of 2023 but, like many parts of Nottinghamshire, Retford could be better placed than most to make a rapid recovery.

To find out more about property investment opportunities in Retford, Nottinghamshire or the wider Midlands region, please call our advisory team on 01244 343 355.

Spotlight on Retford, Nottinghamshire