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Property investment UK is one of the strongest asset classes in the world today. British bricks and mortar has an esteemed global reputation and represents the highest standards within the industry. Buy to let is the strongest aspect of the UK property investment market and that is no more evident than in the two major cities of the Northern Powerhouse; Liverpool and Manchester.

 

In the UK property investment market, especially in Manchester and Liverpool, the key cities in the UK’s Northern Powerhouse, the state of play could not be better for buy to let. Rising house prices, increasingly favourable capital appreciation, growing rental rates and high rental yields are the defining characteristics of a vibrant buy to let property investment UK market.

In terms of political tumult, the UK has not experienced anything like Brexit in its history but the UK property investment market has remained as robust as ever.

 

The common misconception is that by leaving the EU the UK property investment market will sink. As the facts and the data will show, nothing could be further from the truth. The buy to let UK property investment market has only grown. It has fortified itself against the uncertainty felt by other sectors as the March 2019 deadline for the enactment of Article 50 looms.

Property Investment UK Infographic

Where To Invest In The UK?

 

The UK is home to more than eight million rented living spaces, and Liverpool is known for being one of the strongest buy to let hotspots in the country. Its starting costs are low and affordable, and the opportunity for great returns in both capital gains and rental yields have made Liverpool an exciting proposition. The city’s buy to let market is serviced by a growing population of young professionals keen to live in Liverpool’s vibrant city centre.

 

Manchester, the second cornerstone of the Northern Powerhouse, is another buy to let stronghold of the UK property investment market. Deemed the UK’s ‘second city’ and the most liveable city in the UK, Manchester’s population has grown by 20% in the past ten years. By 2030, over 600,000 people will call the city home; many of them young professionals and graduates who stayed upon completion of their studies. A quarter of Manchester’s population is in the 20-29 age bracket; the demographic most likely to become private buy to let tenants in the UK property investment market.

 

Liverpool’s buy to let tenant potential is bigger than ever, with an overall population of 470,000. The number of residents in the city centre has doubled in the last decade. The population burst enjoyed by Liverpool means it has a healthy and varied buy to let sector.

Liverpool is a pivotal cog in the UK’s economic machine. The city contributes £28 billion Gross Value Added (GVA), with much more growth expected in the future. The economy of Manchester is currently worth £57 billion. Both cities have an increasing population, strong workforce, buoyant student numbers, more job opportunities in the professional sector and resurgence in its commercial and retail sectors. The need and demand for high quality buy to let accommodation is constant and paramount to the future of the Northern Powerhouse.

 

Compared to the Northern Powerhouse, London is becoming more and more unappealing as a buy to let investment option. The capital has become untenable as a place to live, work and invest in. The cost of living, goods and services is difficult for many to meet, and the city’s average rent has ballooned to over £2,000 per month.

Liverpool and Manchester economy quote blue background

The year to June 2017 saw approximately 330,000 people leave London. Many of them are professionals in their 30s. Disturbed by a slumped housing market, a lack of affordable rental opportunities and a surfeit of unskilled jobs flooding the market, these London exiles are seeking their fortune elsewhere. The number of London leavers heading 200 miles to the Northern Powerhouse has grown by 371% in the past year. Many of these young and middle-aged professionals are taking jobs within the region’s revitalised sectors.

 

Of interest to these professionals is Manchester’s MediaCityUK. The £1 billion media hub is home to the BBC and ITV, creating a wealth of well-paid media jobs, perfect for luxury buy to let tenants.

 

UK Property Investment

 

When it comes to UK property investment, there is seemingly nothing that can topple the strength and growth of buy to let. It is stable, lucrative and able to withstand any form of political, social or economic storm. Even the recession of 2008 and slump in the UK housing market during 2009 and 2010 failed to stymie its growth.

 

Even in the face of such disturbances, the buy to let UK property investment market has flourished. House prices, rental rates and rental yields have risen exponentially. Furthermore, the Northern Powerhouse has been the strongest performer in the UK property investment market.

 

House prices have grown in the Northern Powerhouse faster and more consistently than anywhere else in the country. The region experienced growth of 5.6% in the 12-month period ending July 2018. London witnessed negative growth of 0.7% across that same period. The wider South East region suffered a similar malaise; only 1.8% of growth in that time. Against the national average of 3.1%, the Northern Powerhouse is racing ahead of every other UK region.

Graph showing rental yields in large european cities

High Rental Yields/Returns In UK Against Other EU Countries

 

Compared to some of Europe’s major cities, the Northern Powerhouse cities have much better buy to let rental yields. Madrid hits an unimpressive 4.72% and Barcelona peaks at only 5.13%. Berlin, Munich and Frankfurt offer yields of 5.14% while Paris stands at 4.25%.

 

Berlin, Paris and Madrid offer landlords and investors very little. The Northern Powerhouse is head and shoulders above them, as well as London.

 

Properties offered by RW Invest in the Northern Powerhouse offer much better returns for buy to let investors. They are some of the most enticing and worthwhile UK property investment ventures on the market.

 

Properties in Liverpool, such as the newly-available One Baltic Square, Fabric District Residence and Sky Gardens offer buy to let investors between 7% and 8% net rental return. For far lower starting costs than you would pay in a European capital, buy to let investors can make a serious and profitable foray into the property investment UK market. The recent selling out of City Terraces, deep in the heart of Liverpool, proves that quality, high end, luxury accommodation is a great investment.

 

Across the River Mersey from Liverpool in the town of Birkenhead, Hamilton Hub, another appealing RW Invest property, offers 8% net rental return. It is situated in an area undergoing £1 billion worth of regeneration. The locale will become a prime location for tenants and workers in this revitalised part of the Northern Powerhouse.

 

The Manchester properties offered by RW Invest are also extremely lucrative for buy to let investors. The Warehouse Manchester and Caxton Hall offer investors between 8% and 9% net rental return.

 

Compared to the Northern Powerhouse, London performs much worse in rental yields. Prime central locations such as Marylebone give only a 2.23% return. Even if investors put their money into locations much further away from the centre, such as Bermondsey, they will still only get a yield of 4.19% from their tenants.

 

The numbers speak for themselves. Buy to let UK property investment in the Northern Powerhouse will give you double the returns you can expect from London, Berlin and Madrid. Liverpool and Manchester are now prime locations. Their growth in population, economy and quality of available living spaces has attracted serious investment from overseas.

Overseas Investment In The UK and Northern Powerhouse

 

The property investment UK market has enjoyed heightened interest and investment, particularly from overseas, in the wake of the Brexit referendum. Investors from nations such as China and Singapore have taken advantage of the UK’s willingness to trade and openness to fresh money as it extricates itself from its established economic relationship with Europe.

 

Post-Brexit, China has increased its level of investment in the UK exponentially. Chinese investors doubled their investment in the UK year on year from 2015 to 2017. After investing just over £4 billion in 2015, then £8.4 billion in 2016, Chinese investors spent a total of £20.8 billion in 2017.

 

Nearly 80% of investors remain unfazed by Brexit, determining that regardless of what may happen, the UK is still a good property investment opportunity. The agitated and inconsistent pound has made buy to let UK property investment a more attractive proposition to overseas investors, who understand that they can get more value for money.

 

Buy to let property in the Northern Powerhouse has seen a huge surge in interest from China. In the 12-month period up to January 2018, Chinese enquiries into property in the region rose by triple figure percentages.

 

Interest in Liverpool buy to let property soared by 160% during that period. Similar enquiries into Manchester buy to let property jumped 256%. Far Eastern buy to let investors are, as shown, attracted to the wealth of available luxury property at low starting costs that promise high yields to landlords, who will also have a huge number of potential eager tenants to choose from.

 

London is proving to be of little interest to those same investors. During the year up to January 2018, enquiries into London buy to let property dropped by 48.5%. The capital’s market is in trouble. Developers and property firms are unable to sell their stock, even with massive 30% reductions or ‘buy one get one free’ offers to investors. In the second quarter of 2018, almost half of all London new-build sales to investors were sold in bulk, such is the desperation to get rid of them. It is a signal that London’s buy to let market is in freefall; a far cry from the current climate in the Northern Powerhouse.

 

The decrease in overseas investment and interest in London is a trend that is becoming common across the rest of the UK with one exception: the Northern Powerhouse. Projects driven and funded by foreign direct investment (FDI) across the rest of the UK have fallen in 2018 for the first time in five years.

 

Inevitably, the trend is reversed in the Northern Powerhouse. In 2016, the Northern Powerhouse was in receipt of 90 FDIs. Of that number, 54 of those were first-time investments from overseas. The Northern Powerhouse attracts not only increased investment from abroad but is also appealing to new generations of investors who understand what an open and profitable market the region is. Manchester attracted 43% of all direct foreign investment deals in the North West region in 2016. That is a 17% increase on the prior year. The United States was the single biggest overseas investor in the Northern Powerhouse during 2016, with 25 FDIs coming from across the Atlantic.

 

In 2017 it was an even better story for the Northern Powerhouse. Liverpool and Manchester attracted more FDIs than major global cities such as Toronto and Barcelona. Such strong and focused overseas investment brings not only immediate cashflow to the North West’s economy, but it also sets the foundations for the future. Over 7,000 new jobs were created in the area last year because of overseas investment in commercial and residential properties.

Infographic about UK Regeneration in Liverpool and Manchester

Regeneration

 

The Northern Powerhouse is all about regeneration, undergoing extensive regeneration and rejuvenation projects that are securing both Liverpool and Manchester’s present and future, while fortifying their respective histories.

 

In Manchester, regeneration is constantly underway. The £1 billion Trafford Waters development will modernise the banks of the Manchester Ship Canal, creating 5,000 jobs in the process. Developed by Peel Land and Property, the company responsible for Liverpool Waters, the area will become home to 3,000 new apartments, one million square feet of commercial and office units, a new hotel, a care home and even a new primary school. Trafford Waters aims to not just revitalise an area but imbue it with a new and modern sense of community spirit.

 

The Great Northern Warehouse in Deansgate is due to get a much-needed shot in the arm after years of misuse. The £300 million Deansgate development will offer 25,000 square feet of commercial space, new apartments and a plan to make the immediate area greener and aesthetically pleasing.

 

St John’s will be a purpose-built urban neighbourhood connecting some of the key areas of Manchester city centre together. It will see the construction of up to 3,000 homes, 320 hotel rooms, 560,000 square feet of workspace as well as 240,000 square feet of retail space.

 

Liverpool Waters is the £5.6 billion project that will revolutionise the city’s Dockland areas. As part of an ambitious 30-year plan, Liverpool Waters will reshape the city coastline, while bringing unprecedented amounts of brand new residential, commercial and office space to swathes of the city that have been crying out for development.

 

The Ten Streets development will knit together the city’s regenerated areas, linking Liverpool Waters with Bramley-Moore Dock, soon to be the home of Everton Football Club’s brand new stadium.

 

The Baltic Triangle is the place to be in Liverpool. It has revitalised Liverpool’s culture and nightlife, as well as offering welcome space to a slew of digital start-ups and young entrepreneurs. The Baltic Triangle is a symbol of the welcoming, diverse and multi-cultural metropolis that Liverpool is and always has been.

 

Across the River Mersey, Wirral Waters is a similarly ambitious scheme. At £4.5 billion and aiming to transform up to 20 million square feet of the left bank of the world-famous river, up to 13,000 new homes and 20,000 jobs are in the pipeline for the region.

 

Liverpool and Manchester, key components of the Northern Powerhouse, are clearly the places to invest in buy to let when it comes to property investment UK. The area already offers much in the way of high rental yields, commerce and retail, attraction to overseas investment and, as the years go by, will become even stronger as regeneration makes both cities powerful entities in the global economy.


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