What Is The Best Location For UK Property Investment?

What Is The Best Location For UK Property Investment? Well, the UK has long had a  “north-south divide”.  In the past, the London property market has been the destination for many property investors. The north has been regarded as the industrial area of England, with the south being the financial and political centre of the country. Now with the Northern regions having everything that London has to offer; international connectivity, high-end restaurants, boutique shopping, world-class entertainment and leisure, and employment opportunities in rapidly expanding business districts, more and more people are drawn to the North as a cheaper alternative to London, which can offer higher yields and stronger growth.

The Latest figures from home track saw house prices falling in real terms in London. However, Manchester, Leicester and Liverpool all grew by more than six percent per annum. Therefore, we could start to see the narrowing of the gap in the north-south divide. Furthermore, it has been widely reported that house prices in the South, particularly London, are in a slow decline.  Whereas, areas in the North and North West are becoming more desirable, and are attracting a lot of property investors. House prices are up in the UK overall in Q1 2018. However, London has been reported to be stifling the growth. Furthermore, experts are predicting the trend to continue in London over the next few years. It is safe to say, other regional property markets are becoming more attractive than previously as buyers look outside of the capital.

Businesses Relocating

The growing trend of companies relocating outside of the capital has been most noticeable within the technology sector. In particular, Manchester has been one of the most notable beneficiaries to the London fallout. Furthermore, the industry in the North West is booming with new tech firms. In addition to Manchester, The “Silicon Canal” in Birmingham is up and coming and soon becoming a rival to Manchester’s  MediaCityUK.

With high profile companies employers as BBC, ITV, Kellog’s & Ericsson. HSBC plans to shift 1,040 jobs to Birmingham, mostly from London and has invested 200 million pounds in the city. Furthermore, Deutsche Bank, has decided to relocate its trading operations to Birmingham. The German Bank explained the reason for expansion into Birmingham was due to cost-effectiveness. Therefore provides a cheaper way to serve its mid-market clients. Deutsche Bank’s representatives believe that the city offers a strong talent base with cheaper housing and short commutes for its staff.

Migration From London

What Is The Best Location For UK Property Investment? UK house prices have risen at a pace which has outstripped wage inflation by 4 to 1.  While the average cost of a home in a British city rose 32 percent in the past four years to 224,926 pounds annual earnings have only increased 7 percent. Which has meant property ownership in London is far out of reach of many workers. According to the Office of National Statistics, a record number of 30-39-year-olds left London in 2013. People have settled in Birmingham, Bristol, Manchester and Oxford.

The Key reasons why people are moving is out from London is due to cheaper alternatives. It is far cheaper to rent or buy in Manchester, Birmingham or Liverpool than London. Therefore, young professionals can have more space for less costs. Many people have become tired of working long hours and long commutes, which is common in London.  With the limited and stagnant earnings and high rental prices in London, many can only live a modest lifestyle.

What Is The Best Location For Property Investment?

What Is The Best Location For Property Investment? Well, the London market will continue to be attractive to nostalgic investors. However, for value for money, the Regional markets have a lot to offer. With higher yields and strong capital appreciation on offer.  If FTSE 100 companies are willing to relocate their offices and capital outside of London, it would be wise for property investors to follow. One of the most exciting areas of alternative property investment is the investment into the hotel sector and student accommodation.

With developers offering fixed assured rental terms. Additionally, the rise in stamp duty in the residential market, have made alternative commercial investments even more popular. It is important to consider, not only what is the best location for property investment, but what is the best property investment sector to fit my needs? Investment is being drawn into the UK’s specialist property sector, a total of £17.7 billion, which equates to a 40% increase on last year, and the expectation is this will continue to increase. UK Specialized Property Investment Rise now accounting for 27% of the UK commercial property market, which is a higher proportion than ever.

Read More: Birmingham an Emerging Property Hotspot

Fastest Rising Property type

Furthermore, in addition to just considering what Is The Best Location For UK Property Investment if you are considering to invest in residential property, you should also consider what unit type, a flat or a house? The Latest data from the Halifax, shows that Houses have risen slower than Flats over the last 5 years.  Halifax estimates the average flats value increases by an average of £1,250. UK flat prices have risen by £75,074 over the last five years. The average price has grown from £157,061 in 2013 to £232,135 in 2018. Flats have risen by 48 percent, compared with a 39 percent increase from non-flats. Despite flats gaining most value, Halifax managing director Russell Galley said semi-detached and terraced properties – the latter of which has risen by an average of 41 per cent over the last five years – are the most popular choice for homebuyers.

Read More: 40% Rise in Specialist Property Investment

London property prices should bounce back over the long term.  The Brexit uncertainty is causing fluctuations. However, savvy property investors are looking to the North West for the best returns in yield and Birmingham as a growth market. As Regional house price growth continues to outperform the South, ongoing investment into infrastructure, and new employment opportunities continue to emerge it is likely that there will be a continued trend of people moving out of the capital. as such, property investors will likely be doing the same.

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