According to land registry data analysed by Savills research team, house price growth in some of UK’s key regional cities like Manchester, Edinburgh and Birmingham have shown an increase against annual growth in London.
Edinburgh races ahead of the line with an annual growth of 9.9 percent against 1.7% for London and 4.1% for the United Kingdom as a whole. Birmingham comes in second with an annual growth of 9.7%, followed by Manchester at 8.7%.
With each of these key regional cities having their own unique character and remarkable attractions, the demand from those looking to live and work here is only increasing.
A strong economic outlook and an ambitious vision are some of the key drivers behind Manchester’s strength in house price growth along with investment in transport infrastructure steadily driving progress in the long term.
The continuous growth in the commercial sector and need for quality office space indicates a strong employment market that is driving residential demand in the city centre. The infrastructure and investment sector is booming, with Manchester only second to London in terms of Foreign Direct Investments in 2017, with 47 new projects.
In addition, the growth of high tech and media sectors have created a pool of highly qualified talent in the 18-35 year old demographic with Manchester boasting the highest graduate retention rate outside London. This sector of the market is dynamic and easily attracted to the flexibility of renting especially in the initial stages of their career thus leading to a significant demand for housing in the city. This also creates the perfect opportunity for investors to allocate funds outside of London and expect strong rental yields and capital growth in return.
Reports suggest that even though the city’s housing supply has accelerated dramatically over the last few years, it still does not sufficiently meet demand and investors are taking advantage of the shortage in available housing stock to secure lucrative deals with guaranteed returns.
Matthew Jay, managing partner at Alliance Investments, said: ‘Manchester has firmly established itself as the most dynamic city in the UK with increasing office take-up and benefiting from rising house prices. We are keen to bridge the gap between demand and supply in a city that’s proving to be attractive to both home grown and overseas investment’
Manchester emerges as a genuine alternative to London for business and employees alike, with a thriving cultural and leisure scene along with first class employment opportunities, the outlook for this fast developing city remains extremely promising.
Joe Shorney, of Savills Birmingham Residential Development Sales, says: ‘The fundamentals for the Midlands remain strong with Birmingham continuing to reposition itself nationally as a major regional centre with a dramatically enhanced profile. The increased connectivity promised through the delivery of Midlands Metro and HS2 is driving demand, bringing more people to Birmingham to live, work and play.
‘Ahead of HS2 at Curzon Street station, there has been significant investment in the regeneration of Birmingham city centre. This has also triggered commercial investment from companies choosing to relocate to the Midland’s such as Deutsche Bank and HSBC, which has helped to drive residential demand, subsequently boosting house price growth.
‘There is significant pent up demand in Birmingham. Since the downturn, the level of new homes development has been substantially reduced with a backlog of delivery. However, this is changing, with more supply now starting to come through. For instance, the regeneration centred around the 43-acre Port Loop site located west of the city centre is a major development planned for the city centre fringe – a huge master plan sets out the vision for up to 1,150 new homes together with associated commercial, retail and leisure facilities in an area which neighbours Edgbaston Reservoir and the Jewellery Quarter.
‘Birmingham is one of the youngest cities in Europe, with under-25 year olds accounting for 40 per cent of the population. Home to five universities, the city is also seeing a high retention of graduates with a knock-on effect on demand for new high-quality housing.
‘We are also seeing an extension of the traditional city core, with residential development opportunities spilling out into areas such as the Gun Quarter, Digbeth, and Ladywood, locations benefiting from increased levels of investment in placemaking and public realm improvements. Further up the ladder the city is acknowledging the need for family housing to stop the exodus into the suburbs. The willingness and ‘can do’ attitude of local authorities to engage is attractive to those looking to invest in the city, emphasised by increasingly acquisitive PLC Housebuilders.
‘The future is looking bright for Birmingham.’
Alliance Investments is a subsidiary of 28 year Property Alliance Group and specialises in property rental and investment opportunities. With offices in Manchester and London, our portfolio includes the majority of sectors including residential, offices, industrial, retail and leisure developments throughout UK’s cities and regions. For more info on upcoming projects, please click here.