One of the primary objectives for any property investor is to secure capital growth on their bought property. In today’s article, I will outline some of the best areas, regions and locations in the UK that are ideally placed to experience good levels of capital growth in the long-term.
Manchester regularly tops the charts for the best places to invest in the United Kingdom, and when you look at its fundamentals, it is not hard to see why. A quarter of Manchester’s population are in their twenties, the prime market for rental property and subsequent capital uplift in property prices once they have reached a point in their career where they can buy. Its strong employment market also adds to its appeal as people follow jobs. Around 80 of the FTSE100 companies have some sort of presence in Manchester, and with wages around 30% lower and living costs around 70% less, it is unsurprising why young professionals may pick somewhere like Manchester over London.
Residential price growth is predicted to be strong, with property specialist JLL predicting a 4.2% rise in prices, compared to a 2.4% rise elsewhere. Rents are also meant to increase above the national average at around 3.5%, allowing for strong capital uplift and rental yields.
Manchester has long been an investors favourite, and other cities such as Birmingham were left in its wake. Keen to shed its industrial reputation, the 2022 Commonwealth games coming to Birmingham and the construction of HS2, that could be about to change. HS2 will slash journey times to London to under one hour which will make it even more convenient for commuters and those who wish to do business in both Birmingham and London. With average house prices in Birmingham sitting at £191,331 compared to £627,818 in London, it is easy to see which city would be preferable for people once the transport links have been improved.
In fact, many companies are starting to look towards Birmingham. Large corporations such as Deutsche Bank, HSBC and PwC have relocated their headquarters to Birmingham and an improving standard of living has increased the city’s appeal to young professionals. The booming jobs market will only attract more young professionals to the city, who will also need a place to call home.
LendInvest included Birmingham on its top 10 buy-to-let postcodes in its Buy to Let Index Report, placing it one spot above Manchester. Perhaps now it is a city that should be at the forefront of investors’ minds.
Liverpool has undergone massive levels of government led projects and local efforts to improve the infrastructure and facilities of the city. Most notably is the Albert Dock Waterfront scheme in the city centre which is a £5.5 billion scheme set to transform 2.3km worth of land along the docks. Proposals are in place for a luxury cruise liner terminal here as well as a £2.5 million Isle of Man ferry. This will all lead to huge levels of growth to property in this vicinity and many new developments are being constructed to capitalise on this.
As a result of the aforementioned regeneration, Liverpool has experienced huge levels of capital appreciation in recent years which is set to increase even more in the near future. Home.co.uk showed a 20% increase in prices on flats in Liverpool from November 2016 to November 2017, rising from £111,394 to £133,876- (http://www.home.co.uk/guides/house_prices_report.htm?location=liverpool&lastyear=1) JLL are also predicting a 23% increase on house prices in Liverpool over the course of 2017-2021, meaning investors are well placed to take advantage and get a piece of the action before further growth takes place.
These are three of the main cities that Tarquin Jones are focusing on in terms of property sourced- certainly when it comes to capital growth. With London no longer the mecca of capital growth in the UK, many domestic and overseas investors are targeting Manchester, Birmingham and Liverpool as ideal alternatives to fulfil their property investment goals.
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