The influx of foreign investment in the UK’s property sector has always been steady, with many overseas investors deeming UK as an extremely attractive investment destination. In recent times, the city of Manchester has come to the forefront as the hotspot for international investment, rising head and shoulders above its counterparts.
The leading players, when it comes to pouring investment into Manchester’s housing and commercial property industry is the Asian contingent including the likes of China and Hong Kong.
Juwai.com, an online property portal for Chinese buyers looking to invest in property abroad, said that in November 2016, the number of Chinese inquiries into Manchester based properties was a whopping 53.8 percent higher than the same month last year. If reports are anything to go by, there was an estimated £2.1bn worth of development projects that consisted of Chinese involvement in 2016. Research from property investment firm, JLL also indicates that Asian investors accounted for 28% of the transactions in the UK property market in 2016, up from the 17% the year before.
At a time when Brexit is projected to deter foreign investment in the UK, it may come as a surprise to some that the complete opposite has transpired. A a closer look at the statistics of Manchester’s property boom shows exactly why foreign investors are excited at the prospect of capitalizing on the said gold rush.
One of the major reasons behind the upsurge in international investment is the Sterling’s 20% devaluation since the EU referendum, which has attracted stakeholders seeking more bang for their buck from around the world. The devaluation also encouraged first time foreign buyers to commit to buying a home or property, with 1,800 of Manchester’s 28,000 newly built homes valued at between £200,000 and £500,000, being snapped up by first time buyers.
Manchester- The ‘Unofficial capital of the purpose-built rental sector’
A combination of “favourable capital and rental growth” has made Manchester a striking prospect. JLL’s February 2017 Northern England Residential Forecasts report predicted 15% faster growth by 2021 in property prices as compared to the rest of the UK. This comes at the back of a documented increase of 30.8% between 2014 and 2016. To add to the enticing property value increase predictions, investors can also expect to see a rental growth of 20.5% over the next four years. A survey conducted by EY suggests that 98 FDI projects were recorded in the North West last year alone, making it the largest number noted in more than a decade. The EY UK Attractiveness Survey also indicates that 54 of these 98 projects were initiated in the city of Manchester. The message seems to be loud and clear, Manchester has managed to rebrand itself as the “unofficial capital of the purpose-built rental sector” in Britain.
Ronald Garrett, Director of Sales at Alliance Investments believes that the interest from international buyers is just the start “Our prediction is that foreign investment in Manchester is still at a stage of infancy. We are projecting a significant rise in the coming years. The recent transactions by Asian investors just add to the growing list of evidence that backs our projections.”
He also cited that the momentous increase in demand has created a situation where there is a lack of supply “The continuous rise in property values and the promise of excellent returns in the form of rental income has resulted in a situation where we are actually experiencing a lack of supply.’’
Alliance investments, the global sales division of Property Alliance Group, a 27 year established UK property developer have a diverse portfolio of properties across all leading parts of Manchester. For more details on their upcoming projects and developments, visit http://alliance-investments.com.hk/