Much of the UK’s investment throughout 2017 will be centred on the northern powerhouse. The government is pushing hard to boost regions outside of the capital, meaning cities such as Manchester, Liverpool, Leeds and Newcastle will see increased funding over a range of sectors.
For buy-to-let property investors in particular, these plans can be of great significance. With a stronger local economy, higher rate of employment and better quality of tenant, the already strong northern housing market looks set to flourish even further in 2017.
Ever since George Osbourne’s declaration of the new ‘northern powerhouse’ back in 2015, a renewed vigour has been evident in helping these regions match the draw of London.
Following a steady stream of regeneration projects since the turn of the century, cities such as Manchester and Liverpool have been transformed into hubs of major economic interest. Wherever there is space, there seems to be some sort of investment scheme taking place, be it office, industry, retail or residential.
We’ve just witnessed the second UK Northern Powerhouse International Conference & Exhibition, where over 2,500 business leaders gathered for a series of talks from public and private sector experts.
The area north of the ‘Midlands engine’ is home to over 15 million people and generates around 20% of the UK’s gross domestic product. International investment here is growing at a faster rate than any other part of the UK, whilst Theresa May has just announced a major industrial strategy for the north.
Despite some opposition, the High-Speed Two (HS2) railway line linking London with Manchester has just received final approval from parliament. When finally completed, HS3 will also greatly improve travel times between the UK’s main northern cities.
Property prices in the north generally sit below the national average, especially when compared to London. This means yields frequently hit the 9-10% mark, especially in areas with many students and young professionals who rely on the rental sector.
Despite the temporary uncertainty surrounding Brexit, the economy has remained resilient and at no time in the UK’s history have more people been in employment. It’s thus no wonder that the vast majority of experts such as Nationwide, MCI Mortgage Club and NatWest, feel positive about property in 2017.
There are plenty of excellent opportunities in the north, where entry prices of around £70,000 will result in strong capital growth in the long term. This is simply unattainable in London. Furthermore, estate agents Savills, has forecast that rents will rise by 2.5% across the UK in 2017.
The northern rental market is buoyed by a strong demand for student housing, particularly for purpose-built accommodation. Cities such as Manchester, Liverpool, Leeds and Edinburgh attract thousands of students every year, meaning you’re almost certain of enquiries once placed on the market.
To negate the traditional risks of student renting, for example damaged property or unpaid rent, many investors are drawn towards managed lets. The estate agency will take care of things on your behalf, allowing you to sit back and wait for the guaranteed yields to roll in.
If you’re interested in investing in the North, contact us today to find out about our opportunities.
If you’d like to know more about the potential for the northern powerhouse, check out how Property investment in the North is to be boosted by Theresa May’s industrial strategy.