Is UK Property Still a Viable Investment Option?
Given the prevailing economic circumstances, numerous investors are pondering whether investing in UK property still holds merit.
In brief, the answer is “yes,” albeit with a caveat for prospective buy-to-let investors who must exercise caution in selecting the areas for property investments.
At Magnate Assets, we recommend pursuing buy-to-let properties in prime Property Hot Spots characterized by the following attributes:
– Robust economic growth rates
– A strong presence of esteemed blue-chip companies
– High levels of employment within professional sectors such as finance, technology, and media
– Substantial enrollment in higher education institutions
– A noteworthy rate of postgraduate talent retention, contributing to the workforce for blue-chip firms and fostering population growth
– Ongoing and planned large-scale regeneration projects
– Favorable income-to-property price ratios, allowing room for property price appreciation
– An imbalance between supply and demand for high-quality private rental accommodations
Where Should I Consider Investing in UK Buy-to-Let Property?
Manchester continues to reign as the top choice for property investors in the UK, thanks to its consistent growth in rental income and property values in recent years, significantly outperforming the national averages.
From May 2022 to May 2023, Manchester recorded an impressive annual price growth of 9.3%, showcasing its resilience. Additionally, industry experts project an even more remarkable 19.3% price growth over the next five years, which appears likely to be exceeded.
Why is the Manchester Property Market Thriving?
– Manchester boasts 82 of the FTSE 100 companies with a presence in the city.
– Billions of pounds are being invested across various regeneration zones.
– It serves as a hub for the UK’s media industry.
– Manchester hosts the largest student population in Europe outside of London.
– High postgraduate retention rates contribute to a talent pool that attracts major corporations.
– The city experiences substantial population growth.
Manchester’s Rental Market
The rental market in Manchester is exceptionally buoyant, with the leading lettings agency in the city reporting over 18,000 viewing requests in less than 30 days!
Rental values in Manchester have surged by 4% in just three months, and industry experts anticipate a substantial 21.6% increase in rental values over the next five years, providing investors with an attractive yield.
During the pandemic, there was a notable trend of renters seeking larger properties, moving away from city centers in search of homes with gardens and green spaces as they worked from home. However, the current trend is witnessing a reversal of this “race for space” as renters reassess their priorities, now desiring homes closer to city centers, thereby igniting an Urban Revival.
Notably, one of our premier developments in Manchester achieved 90% tenancy within a month of completion in early July 2023. This underscores the robust demand for rentals in the city.
Manchester’s Thriving Economy
Numerous large corporations have established offices in Manchester or relocated from the south to capitalize on cost efficiencies and access Manchester’s rich talent pool—an initiative often referred to as “North Shoring.” This includes notable names such as BBC, Amazon, Freshfields, Microsoft, AstraZeneca, Siemens, Ericsson, Google, Kellogg’s, Barclays, and the Royal Bank of Scotland. Remarkably, 82 of the FTSE 100 companies maintain a presence in Manchester.
This influx of businesses has created substantial employment opportunities for Manchester’s population, leading to the fastest job growth rates in the UK, at an astounding 84% increase from 1998 to 2015. This growth is second only to cities like Leeds, Birmingham, and Liverpool, according to the Centre for Cities.
Manchester is now home to MediaCityUK, Europe’s largest purpose-built media hub, housing major broadcasters such as the BBC and ITV. Moreover, Manchester’s burgeoning central business district, Spinningfields, has earned the moniker “Canary Wharf of the North,” attracting prominent financial institutions such as PwC, Deloitte, HSBC, and Barclays.
Greater Manchester stands as the UK’s third-largest regional economy, comprising pivotal employers with an annual Gross Value Added (GVA) of £66.4 billion. Manchester plays a vital role in the government’s Northern Powerhouse initiative, with ongoing regeneration projects, enhanced infrastructure, and improved connectivity to London, all contributing significantly to its burgeoning economy.