How North West Regeneration Areas are Supporting the UK Property Market
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In recent months, the UK property market has seen the unparalleled growth it has experienced so far this year begin to slow down.
There are a few reasons for this, such as the cost of living crisis and the falling GBP causing homeowners to save rather than spend. Buyer demand is slowing down after a frantic year, and we are seeing that reflected in the growth of the market.
Despite these issues causing slower growth than in previous months, there are some areas of the UK which continue to thrive in spite of this national cool-down period.
The North-West in particular is a region where the property market continues to show signs of strong growth that will last into the foreseeable future.
Cities in the North-West such as Liverpool and Manchester have proven sturdy enough to weather these problems, as the regeneration being pumped into these cities is helping their property markets to thrive.
Regeneration schemes have transformed sectors of these cities from urban wastelands into thriving centres of industry, culture and housing that are popular with young professionals and students.
In this news blog, we’ll explain why these North-West regeneration areas are helping to support the UK property market, and how their success affects the wider region.
What Effects are Regeneration Areas Having on the North-West’s Property Market?
Compared to other areas of the UK, the North-West’s property market is currently thriving.
Current predictions fron Savills estimates that the North-West will see the highest five year growth in house prices of any region of the UK, with the latest data forecasting a 24.3% growth from now to 2026.
The UK House Price Index’s data is showing a similar trend, with the latest report showing that in the past year, the North-West has seen an 18.1% increase in house prices from July 2021.
This is combined with some of the most affordable house prices in the UK, with the average property price in the North-West coming in at £217,077 as of the most recent data.
These prices are under half of London’s average of £543,517, giving the North-West’s housing market a distinct advantage over other regions thanks to the mix of low prices and potential for rapid growth.
This data proves that the North-West stands head and shoulders above other regions of the UK in terms of the property market, and that this period of prosperity is set to continue into the future.
Which Regeneration Areas are Affecting the North-West’s Property Market
Areas of Liverpool such as the Baltic Triangle have undergone massive regeneration efforts in the past few years.
Over £128 million has been pumped into the region with a further commitment of £62 million expected to follow in the coming years. This is a major redevelopment of an area located in the perfect spot between the city centre and the docks, which is already proving popular with young people.
These regeneration efforts have transformed the Baltic Triangle into a thriving area of Liverpool’s city centre, with a new Police HQ, residential projects such as Central Park and many attractions like Ghetto Golf and Camp & Furnace drawing many to the area.
The Baltic Triangle is often considered one of the most popular and trendy areas to live in Liverpool, thank to the regeneration schemes transforming the area. It draws in hundreds of new young professionals to the city each year.
Other regeneration schemes in Liverpool include the LiverpoolONE development which rejuvenated the city’s retail and entertainment sectors, and the Knowledge Quarter which aims to bring Liverpool to the forefront of the UK’s science, technology and health sectors.
There are future plans that will renovate more of the city, such as the Liverpool Waters project which will see the city transformed into a modern hub of commerce and living in the coming years.
Similarly, Manchester has undergone some major regeneration efforts in recent years which has seen the city become one of the most thriving and popular locations in the UK.
It can be argued that Manchester is the largest city in the country outside of London, and it’s exemplary regeneration schemes are a big reason as to why.
MediaCityUK is one of the largest developments in the entertainment industry, drawing in major media companies such as the BBC and Granada Studios. This draws in thousands to the city looking for work in the media sector, helping to raise rental prices.
Considered one of the main hubs of the media industry, especially in the North of England, MediaCityUK is home to dozens of businesses from a variety of sectors.
Spinningfields is another major regeneration project in Manchester, often dubbed the ‘Canary Wharf of the North’. A massive £1.5 billion investment, Spinningfields is the centre of Manchester’s financial sector and restaurant scene that has added a brand new area to the city centre.
A third major regeneration development is NOMA, one of the largest developments in the North-West. Focused on some of the city’s most deprived areas, NOMA has seen major companies such as The Co-Operative Group move their headquarters to Manchester.
As you can see, there are numerous regeneration schemes across the North-West which are driving these cities to the top of the UK property market.
Why Are Regeneration Areas Affecting the North-West’s Property Market?
Regeneration areas in the North-West are helping the area to stand above other regional competitors thanks to several key reasons.
Due to the creation of thousands of new jobs across a variety of sectors, many young professionals are moving to these regeneration areas in search of work. This is helping to support the rental market as many in this age group prefer to rent flats close to where they work.
With the influx of new residents, large new residential developments often accompany or are a part of regeneration schemes to make room for those moving to the North-West.
New builds are often more expensive due to their desirable status, and so this helps to drive house prices in the North-West up. Recent developments such as Central Park, Heap’s Mill and Embankment Exchange have proven popular with property investors due to the mix of affordable prices and the potential for high rental yields.
Both Liverpool and Manchester have some of the highest rental yields in the nation, which is good news for investors as it means higher returns on their investment. For example, the L4 postcode in Liverpool has an average rental yield of 6.5%, and the M7 postcode in Manchester has an average yield of 6.6%.
In addition, the influx of newcomers to the North-West is driven in part by the affordable property prices the region has to offer.
As mentioned earlier, the North-West has some of the most affordable prices in the UK, so buyers can get more value for their money than if they looked elsewhere.
This is causing many to invest in property in the North-West due to the mixture of affordability and high rental demand creating a perfect mix for investor to make some serious profit from the region.
In addition, these affordable prices are seeing many move North due to the expense of living in Southern cities such as London. The Guardian reported in 2021 that a record number of Londoners had bought homes outside the capital, with 62% choosing to live elsewhere.
Regeneration areas are also popular with students, due to the number of trendy hotspots they normally host. The innovations to sectors such as science, technology and business are also attractive as it means local universities can make the most of these new developments.
This mean student accommodation often follows regeneration schemes, further drawing more newcomers to the North-West who often stay after their studes due to the wide-ranging amount of graduate jobs available in the North-West’s major cities.
Student accommodation is good for both bringing in newcomers to the North-West and for property investors, as it forms a solid portion of the buy-to-let market in the UK due to the consistent need for student housing.
As you can see, there are numerous ways that regeneration areas in the North-West are supporting the UK property market, and by taking the slack from underperforming areas of the country they are becoming hotspots for property investors.
If you want to learn more about the North West’s regeneration areas, or about the UK property market in general, try talking to our sales team today.
With over 17 years of experience in the property investment industry, we here at RWInvest pride ourselves on our expert knowledge of all things property. Specialising in Liverpool and Manchester, we have a range of below-market-price developments ready for investment right now.
Disclaimer: This content was originally written in September 2022. By the time you read it, some of the statistics used may have changed.
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