Invest in Manchester
RICS forecasts that the north west will outperform in terms of property price growth, and as rents are predicted to rise at a faster pace than house prices, now is the time to consider investment. According to Rics, rents are predicted to increase by just over 25%, whilst house prices are expected to rise by just under 20%. In part this is due to the average age of a first-time buyer being pushed up to 38, as housing becomes increasingly unaffordable.
Other factors that have contributed to an increase in demand for rental properties and therefore the price include a slow-down in the rate of new constructions, of which Savills warns will only intensify over the coming months when it predicted that almost half of London’s construction plans could fall through, and the lack of new buy to let landlords.
Manchester is considered the crown jewel of the Northern Powerhouse, and it is receiving a considerable amount of investment. Areas such as Salford Quays has seen a significant amount of regeneration, and it was the focus of the largest urban regeneration project in the UK following the closure of the dockyards. With the regeneration came MediaCityUK, a mixed-use property development designed to cater towards the creative industries. This has seen an influx of new businesses, attracted to the city due to lower business rates than those seen in London. Young professionals are moving to Manchester for work following the influx of companies resettling in the area, such as the Guardian and BBC.
The regeneration of Manchester throughout the years from the development of NOMA to Spinningfields has been phenomenal. It was one of the key drivers that caused the city’s population to increase by 19% between 2001 – 2011.
Developers are exhibiting more confidence in Manchester, buoyed by the recent sale of One St Peter’s Square to Deka Immobilien. At the time construction was commenced One St Peter’s Square was the only new development in the city centre, but its success has influenced the building of St Petersfield and the new tram site.
Businesses are attracted to Manchester due to the generally lower running costs. Average salaries in Manchester sit at just above £26,000 (£26,833) compared to £34,626 in London. Grade A office space in central Manchester is also decidedly cheaper at £35 per square foot, compared to £125 in London’s West End. With these prices, it is not surprising businesses are seeing the benefit of relocating to Manchester.
Invest in Liverpool
Liverpool offers a charm that no other UK city can offer. It is steeped in tradition from being at the centre of the industrial revolution and the expansion of the empire to the Beatles and Merseybeat. The city was often seen as playing second fiddle to other Northern cities such as Manchester and Leeds but this is no longer the case. Liverpool’s stock is on the rise.
The city offers an endless supply of fashionable bars, fine dining restaurants, designer boutiques and entertainment hot spots. It’s cathedrals, parks, museums and football grounds are also big draws for visitors to this world-famous tourist attraction. Liverpool’s economy is one of the UK’s fastest growing and attracting multinational business’s from around the world in search of the region’s educated and well-trained workforce. Currently the
regional economy supports nearly 295,000 business’s and is aggressively looking to increase this.
The student population of Liverpool now totals 70,000 and growing. No longer are students content with living in a damp ridden ‘house share’, terrace with their friends but are now interested in brand new facilities offering concierge services, gyms, café’s and the fastest broadband they can get their hands on. This makes Liverpool stand out as students can go to world class institutions, immerse themselves in a rich tapestry of Liverpool’s historic legacy and live in some of the most cutting-edge student accommodation digs.
For investors, Liverpool offers incredible value for money, high yields and access to a fantastic stream of students living in this world-renowned city.
Invest in Birmingham
With prices in London spiraling out of control, businesses and individuals alike are looking outwards at other cities to invest and live in. Birmingham’s cultural offerings, more affordable prices and booming business sector has made it an increasingly attractive prospect.
Birmingham is often affectionately known as Britain’s second city, having one of the largest populations outside of London. Birmingham has the one of the largest legal and financial services centres outside of London, with a GVA of £226 billion. It also enjoys a strategically advantageous position in the country, as 90% of the population can reach Birmingham in under four hours.
It is predicted that with the construction of HS2, more people will move to Birmingham and commute to London. HS2 journey times between Birmingham and London will take 49 minutes – the typical London journey to work is 45 minutes. Can you imagine what impact that will have on Birmingham house prices?
More people commuting will increase demand for land and thereby drive up the associated cost of new developments. As land costs rise the feasibility of new developments becomes constrained. Fewer developments means more demand for a limited supply, which is positive for rental income and capital growth.
Similar to Manchester, Birmingham boasts a young population – the youngest of any major city in Europe in fact. Under 25s make up 40% of the population, and one third of the city’s inhabitants are from an ethnic minority, making it one of the most diverse cities in the UK. Its young demographic lends itself well to the rental market, as young adults generally do not have the capital to invest, or the inclination and would rather experience living in different areas.
Recent graduates of Birmingham’s universities are also increasingly likely to stay in the city, due to the quality of life, more affordable prices and job prospects, which makes investing in Birmingham an attractive prospect for high occupancy levels.
Invest in London
The UK capital has long been one of the world’s most desirable cities and a centre for banking and finance. It is therefore little wonder that the capital has been attracting international talent keen to buy in Chelsea and other prime neighbourhoods.
In a 2016 study of 30 global cities conducted by PwC, London ranked in first place. The survey’s respondents, 5,200 well-educated, high net-worth adults from 16 countries around the world, considered the city’s key attributes to be well-developed infrastructure, its connection to the rest of the world, a well-developed legal framework and the breadth of education for its population.
London is also one of Europe’s greenest capitals, with acres of parkland stretching between neighbourhoods as diverse as they are characterful. It has more than forty universities, tens of thousands of eateries and boutiques and an impressive array of museums, theatres and music venues.
Millions of pounds are being invested into regeneration projects and transport links across the capital. The new Elizabeth Line, connecting Heathrow to Essex, will drastically reduce travel time in and out of central London. It is due for completion in December 2018 and is already drawing potential property buyers along its route.
Overall, there is a clear sense that London is making efforts to ensure it maintains its place on the map post-Brexit. In the long term, prime property yields the largest returns: when the dust of political uncertainty is swept away from this dynamic capital, those who have invested in it will have no regrets.