Research suggests that property investors can get the highest long term returns in regeneration areas.

Five year returns in such areas have been higher – 16.7% against an average of 15.1% – and less volatile.

There has been stronger capital growth in residential values in areas that were previously overlooked or dismissed.

The study, carried out by the Investment Property Databank with Morley Fund Management, English Partnerships and Savills, takes data from 581 properties in 20 of England’s urban regeneration companies.

Over the shorter periods of one year and three years, returns from regeneration areas were slightly lower than the average, according to the IPD. But the research concluded: “There seems to be no substantial disadvantage in regeneration area property investment.”

However, the recent introduction of business rates on empty properties may act as a brake on regeneration, and the report stressed that any willingness to enter the market is still a nascent trend.