Data from the Office for National Statistics (ONS) reports that deaths from dementia and Alzheimer’s disease have increased, making these conditions the leading cause of death in England and Wales for the third consecutive year.
ONS released the latest statistics for births, deaths and marriages in October.
Last year, 67,641 deaths were caused by dementia and Alzheimer’s, an increase from 62,948 in 2016 and accounting for more than 1 in 8 of all deaths.
The overall number of deaths recorded was the highest since 2003, with 533,253 registered in England and Wales in 2017.
While mortality rates caused by dementia and Alzheimer’s have increased in both men and women, ONS highlighted that they accounted for a staggering 16.5% of deaths among women.
The increase in deaths is a great cause for concern. Jeremy Hughes, the chief executive of the UK’s Alzheimer’s Society ranks dementia as the “biggest health and care crisis of our time”.
The growing imbalance between household income and house price growth has caused a severe affordability crisis. Most households can no longer afford to buy a property in major cities without a substantial inheritance, not to mention rents that continue to consume a significant share of the monthly income.
The skyscrapers in Singapore, though magnificent and tall, are proof of the island’s lack of space — after all, with land so limited, the only way to go is up.
Singapore was rated by S&P Global Ratings as the second highest region in Asia for house prices, thanks to growing foreign demand for private housing.
Prices of private homes are still inching higher, albeit at the slowest pace in five quarters (June 2017 – June 2018). Data by the Urban Redevelopment Authority (URA) shows that private residential prices in Singapore increased 0.5% in the last 3 months, compared to a 3.4% advancement in the June quarter. All this despite additional property curbs imposed by the government, the latest being the implementation of the Additional Buyer’s Stamp Duty (ABSD) and Loan Limit, to avoid a property bubble burst, which potentially has the risk of destabilizing the nation’s economy.
The ABSD rates were raised by 5% for citizens and permanent residents (PRs) buying second and subsequent homes, and by 10% for entities, said the finance and national development ministries, as well as the Monetary Authority of Singapore (MAS) in a joint release. There will be no change in rates for citizens or PRs who are first-time buyers.
“The government has been monitoring the property market closely. We are very concerned that prices are running ahead of economic fundamentals,” said Lawrence Wong, Minister for National Development in an interview with Channel NewsAsia.
The UBS Global Real Estate Bubble Index 2018 shows Singapore and Hong Kong amongst major cities at risk of a property bubble burst, Hong Kong being the top of the list at a whopping 2.03%. Singapore, though rated fair-valued (0.44), is close to being overvalued.
Ultimately, the growing imbalance between household income and house price growth has caused a severe affordability crisis. Most households can no longer afford to buy a property in major cities without a substantial inheritance, not to mention rents that continue to consume a significant share of the monthly income.
Stratospheric Property Prices at the Fragrant Harbour
The Hong Kong property market has retained its vibrant momentum. Residential market prices have risen again by more than 10% over the last four quarters (as at Sept 2018), raising the city’s UBS Global Real Estate Bubble Index score higher within the bubble-risk zone.
Since 2008, property prices have doubled while rents have gone up by 15% and incomes have remained unchanged in real terms. The market is chronically undersupplied. Over the last decade, its affordability has fallen the most among many other cities in the European and Asian region.
Even for highly-skilled workers, property ownership is now out of reach. With citizens priced out of their own market, political measure has mounted to curb price growth. Recently, the government announced an occupancy tax for vacant, completed units to encourage developers to sell them as quickly as possible, in an effort to improve supply.
As high as the initiative taken by the authorities to prevent further crisis in the market and to decelerate house price growth, a sharp correction seems nearly unlikely.
A Change of Focus
It is now apparent why investors from Singapore and Hong Kong are looking beyond their own shores to invest their money. Countries such as the UK and Australia are a top choice for property investors looking for good returns.
In the UK, investors are increasingly shifting their focus from London to regional cities such as Manchester and Liverpool, due to growth potential and market demand.
The latest data from Private Finance has shown that Manchester and Liverpool are among the UK’s top 10 cities for strong rental demand, promising prominent rental yields of 4.8% and 4.6%, respectively.
Meanwhile, the increase in the foreign student population continues to drive demand for accommodation, adding to the appeal of the UK property investment market, particularly in top university cities.
Shaun Church, Director of Private Finance, commented that while recent (April 2016) stamp duty changes may have dampened landlords’ appetites, buy-to-let property still remains a viable investment. He added that strong rental incomes matched with declining mortgage costs mean that investors can still enjoy a level of return on their investment they’d be hard pressed to find elsewhere.
Investing Down Under
House price growth in Australia has slowed in recent months, led by Sydney and Melbourne. A forecast done by BIS Oxford Economics suggests that the Australian housing market is in for soft landing.
Taking inflation into account, BIS predicts that modest price declines will take place in most capital cities over the next 12 months, but that the situation will turn around, transforming into growth over the next 3 years.
Hence, despite the current downfall, the Australian housing market — supported by low interest rates, a relatively stable economic environment and a strong and promising population growth — is unlikely to crash.
The high number of skilled foreign migrants flocking Down Under will further strengthen the underlying demand for houses. This may well be a good time to have an eye on the Australian market.
It’s no secret that the housing market in Hong Kong is the world’s most expensive. Data by the Rating and Valuation Department reports that as of July this year, property prices on the island had risen for the 27th consecutive month.
According to Demographia, the average house in Hong Kong costs 19.4 times the local gross income — a clear explanation why homeownership levels in this city are among the lowest globally.
Its luxury developments, in particular, are worth hundreds of millions, and the higher the redevelopment value of an area, the more expensive it is. The Deep Water Bay development, for instance, costs approximately £576m. Upon redevelopment, houses built on the site could fetch a whopping £13,518 psf!
Homebuyers are betting that Hong Kong’s property prices will continue their upward spiral, despite the government’s effort to tackle affordability and enable people to afford their homes.
With a population of 7.3 million and limited space, the city is facing serious housing issues. Which is why Hong Kongers have increasingly been looking to the UK property market given its relative affordability and high investment returns. In 2017, Skipton noted a 65% rise in buy-to-let mortgage completions from Hong Kong investors compared to 2016. This number seems to have increased further this year.
Skipton International is a financial institution and bank wholly owned by Skipton Building Society. Skipton offers a wide range of offshore savings accounts and mortgages for buy-to-let investments in the UK.
Interestingly, even though London remains the top investment choice for some, a growing number of Hong Kong nationals have begun casting their sights on Manchester for better investment opportunities and returns.
As a core city of the Northern Powerhouse, Manchester, as well as other northern cities like Liverpool, are major beneficiaries of the UK government’s various master plans to boost the economy. These city centres are evolving and expanding rapidly with new business districts and residential areas – enticing Hong Kong and other Asian investors.
At the moment, UK’s house prices are rising at the slowest annual rate for almost five years according to the Office for National Statistics, yet, until now, the government has failed to ensure that housing supply meets the demand.
As Manchester and Liverpool continue developing and creating more jobs, it is expected that demand for housing will increase, thanks to the growth in internal and overseas migrants.s. Thus, big opportunities for investment into the housing sector — and its profitable returns — continue to abound.
As the world progresses into a new era and populations grow, cities, too, will evolve, transforming from nondescript outer suburbs into big capital cities, like Manchester, Liverpool, Birmingham – even Kuala Lumpur. Infrastructural growth is the main catalyst for the changes that attract migrants, causing an increment in population numbers. Thus, small cities become capital cities.
In the UK, some of the most exciting cities today in terms of population, job and infrastructural growth are Birmingham, Liverpool and Manchester.
Research compiled by Centre for Cities cites Birmingham as the second fastest growing city after Liverpool from 2002 – 2015, increasing from 9,800 to 25,800 people — 7 times faster than London over the same period. This is impressive, given how London had completely eclipsed Birmingham in the past. How the tides have changed!
Knight Frank reports that the number of people living in Birmingham will rise by 171,000 to a total of 1.3 million people by 2039, especially with the expansion of the HS2 high-speed rail line being built in central Birmingham and nearby Solihull, followed by other regeneration projects. A sweet enticement to new investors indeed.
Birmingham: One of the Best Performing Cities in England & Wales
In the face of this renaissance, this booming city, also fondly known as “The City of A Thousand Trades” maintains its status as the heartland for British industry. The growth of the motor car as well as manufacturing continues to support the industrial sector in England and Wales, creating more job opportunities and attracting more people — many of whom have relocated from London.
Between 1998 and 2015, job growth in Birmingham hit 30%, representing around 30,600 jobs in total.
Biggest Growth in City Centre Population & Jobs in England and Wales
However, despite the massive development and job growth, Birmingham is facing a shortage of housing. Between 2011 and 2016, only an estimated 8,000 new houses were built, whereas the actual demand was around 20,000.
The latest data by Hometrack shows that Birmingham is at the third place of house price growth in England, after Manchester and Liverpool, whilst London remains at the bottom.
Manchester clinched top spot at 7.4% growth, followed by Liverpool at 7.2%, and Birmingham at 6.8%. London stayed somewhat flat at only 0.7%.
The average price in Birmingham was at £161,200, slightly lower than Manchester at £166,100, and Liverpool, at £121,900.While price growth in London has been static, house prices there are more than double the national average at £494,800!
Clearly, cities in the Northwest received high capital gains over the last 12 months, yet there is still much room for growth.
The outlook for the housing market in Birmingham appears rosy, thanks to its economic growth thus far.
The region’s strong performance is mainly attributed to its manufacturing sector. In 2016, manufacturing made up 11% of employment in Birmingham, compared to the average for UK cities of 8.8%.
Due to costly house prices, as well as lesser employment opportunities, many Londoners, especially millennials, are relocating to Birmingham,and the other booming cities of Manchester and, Liverpool .
Ultimately, urban regeneration has played a vital part in these cities’ transformations, influencing the movement of millennials towards greater opportunities such as education, jobs and employment options. Savvy investors are starting to see the opportunities in store for Birmingham. Are you an investor? Are you thinking of making your money work for you? Then then you don’t want to miss out
Malaysia had its fair share of ups and downs in 2017. While the overall Malaysian economy fared well throughout the year, international notoriety for the 1MDB scandal and plunging property market proved to be it’s not so subtle undoing.
According to Bank Negara Malaysia governor Muhammad Ibrahim, the ringgit did strengthen by 14.6% last year, with the upswing greatly credited to market forces. Such forces did not, however, include the property market.
The Malaysian Reserve reports that due to an excess of housing supply, economic and political concerns as well as exorbitant house prices, local high-end and low-end properties seem unlikely to recover from its fall in 2017 anytime soon.
According to National Property Information Centre (Napic), the first quarter of 2017 showed 130,690 unsold residential properties throughout the country, demonstrating the oversupply currently besetting the nation — also revealed was that the top five highest rental yields recorded last year were lower than those in 2015.
The total unsold units in Napic’s findings include overhang (completed, but unsold) units, unsold under construction units, as well as SoHo (small office/home office) units and serviced apartments.
The majority of unsold housing spaces fall under the above-RM250,000 category; 83% of them, to be precise. Of this 83%, 61% of the total unsold units comprise high-rise properties, of which almost 100% were priced above RM250,000.
Housing affordability remains a primary problem in the Malaysian property market. A summary of what Affin Hwang Investment Bank Bhd analyst Loong Chee Wei told The Malaysian Reserve is as follows: the property market is far from an upturn due to the rising cost of living and the disconnect between society’s income and affordability level.
The commercial sector in Malaysia also faced a major downturn due to a glut in the market. True vacancy rates in Klang Valley malls were up to 60% in some areas, according to a Financial Times (FT) article acknowledging the country’s continued obsession with building more shopping space despite chronic oversupply.
What best illustrates the critical oversupply in Malaysia is the value of unsold and unutilised a properties which rounded off to a whopping RM35.5 billion.
With the previously mentioned conditions in mind, the local property market is set to welcome a buyers market. Local property investors seeking great returns would find it in their best interest to manage expectations as property sales in Malaysia are not as attractive as they used to be.
Rising Ringgit, Rising Opportunities for Investment Overseas
Public Investment Bank Bhd’s research arm has reported that Malaysia is slated to become the second fastest growing economy in Asean. The Malaysian economic outlook for 2018 and a steady growth of the local currency have opened doors for investors who are looking to leverage on flourishing property markets overseas.
The UK and Australia are home to a high-yielding, growing property market where the currency is stronger, hence rental returns and appreciation are at a higher value than the ringgit.
Moreover, these countries are home to a critical undersupply of houses unlike Malaysia, following a high population growth due to migration, job creations and educational opportunities. Furthermore, regeneration schemes that are taking place in the UK and Australia, such as the Knowledge Quarter in Liverpool and the ‘super city’ project in Melbourne, will further drive population growth.
“The UK and Australia have strong growth potential. The population and its demand for housing have grown faster than supply, causing property prices to keep appreciating. It is also because of this, that there is a strong rental market,” says property expert Virata Thaivasigamony of CSI Prop. “With the current and forecasted performance of the ringgit, alongside the weakened pound and Australian dollar, investors now have the opportunity to invest from a position of strength. Diversifying investments is key to hedging against uncertainties both locally and globally.”
Among the various evolutions Britain is undergoing is its acceptance of renting homes. A sudden decline in homeownership depicts the UK’s new perspective on accommodation: the percentage of householders who own their homes has dropped by 7% since homeownership hit its peak in 2003.
The emergence of the Generation Rent is illustrated by research from PwC, revealing that almost 60% of 20-39 year-olds in England will rent their homes by 2025 with only 26% getting on the housing ladder. Concertedly, government data reveals that the private rented sector has doubled in size since 2004, with almost 50% of people in England aged 25 to 34 paying a private landlord for their accommodation. These statistics point towards a booming buy-to-let sector, with the younger generation playing a very big role.
Worth noting is a more personal perspective on renting. A survey released in January, 2018, reveal that three-quarters of British adults aged 18 to 30 don’t believe they will ever be able to afford to buy a home even though they have full-time jobs.
Philip, 26, from Yorkshire, said this of his experience so far: “By the time you have saved up an extra £1000 towards a deposit, the house values have gone up by £2k, £5k, £10k. It’s impossible.”
Some, like Jamie, a Business Manager for a Health GP Company in Northumberland, have a slightly different view. “I have no issues with (renting). There is, to a degree, temporised value; you can often live in a nicer area, nicer street etc. for a cheaper monthly payment than a mortgage payment. Some see renting as ‘throwing money down the drain’ but I see it differently. Renting allows you to become, in some odd regard, a more static member of the travelling community.” he says.
Jamie’s welcoming attitude mirrors the widespread acceptance of renting throughout the rest of Europe. In France, just over 50% of the population live in their own properties. And in Paris, the figure is less than one in three. In Germany, house ownership is even more scarce. Only 39% of Germans own the homes that they live in, and in Berlin this figure dwindles down to just a mere 13% of the population owning their own home!
With projections seeing Britain as a new nation of renters, here are 5 reasons why the buy-to-let sector will remain crucial in the UK for some time to come:
1. It’s about 20% cheaper to rent a home in the UK on a monthly basis than to buy (Savills)
Back in 1996 renting a home used to be 25% more expensive than owning one but in 2007, it became 79% cheaper to rent than to own! According to Savill’s calculation, for a first-time buyer’s monthly costs to be lower than the costs of renting, the purchaser would require, on average, a deposit of at least 39% of the value of the property!
2. Reason #2: House prices greatly surpass wage growth
A typical home in the UK now costs six times average annual earnings despite slowing house price inflation. According to Nationwide, house prices have risen by 20% over the last three years while wages rose by just 6% — the average price of a house in England today is 6 times the average price it was 3 decades ago!
3. Private rented sector – biggest provider of rented homes
The private rented sector has taken over from councils and housing associations as the biggest provider of rented homes with prices paid by tenants in Britain increasing by 2.3% in the 12 months to Sept 2016, according to latest official data.
4. The UK has an undersupply of housing
The UK is currently facing the worst housing undersupply since the Second World War. In late 2015, the BBC published an incriminating article on the shortage of housing in the UK, citing the Labour government’s failure to build 240,000 homes by 2016 — a target set in 2007. Brexit-backer Iain Duncan Smith said the UK would need to build 240 houses a day for 20 years to cope with increased demand. The outcome of low supply and high demand are skyrocketing prices. With house prices being raised at unaffordable rates, the best bet would be to rent.
5. Renting: The Preferred Lifestyle
While some decide to rent due to economic reasons, some are choosing it based on lifestyle. Millenials are choosing to settle down later in life as they switch jobs and careers more often than their parents. A research conducted by AXA discovered that less than 50% of the research participants are renting because they cannot afford it. The research revealed that many enjoy the freedom and flexibility of being mortgage-free.
With the potential of the buy-to-let sector being a means for lucrative returns already established, the shrewd investor would find it in their best interest to know where, exactly, to get the highest rental yields in the UK! Liverpool and Manchester, specifically, provide great returns!
Today’s generation are tomorrow’s property owners/investors and landlords, as well as future tenants. Thus, it is vital to observe the trends in the property market in order to reap the best benefits from our investments.
One thing that’s gotten very clear is that youngsters are becoming more disenchanted with the housing market. Millennials all over the world, especially in major capital cities like London, Manchester, Melbourne — even in Kuala Lumpur — are facing difficulty in getting on to the property ladder.
Affordability is a prime factor that millennials have to consider when buying a house today. Despite government initiatives provided for first-time house buyers (who are mainly millennials), affordability remains a serious issue, especially if the property of choice is in a prime location.
Chances are that lower-priced properties will not live up to most expectations, namely, convenience and proximity to what matters. Land size is no longer a priority for millennials; rather, easy access to transport links, hospitals, educational institutions, convenience stores, and the city centre are what counts. Even with governmental incentives, properties within reach of affordability are usually located in the outer suburbs, which tend to be less developed than the city centre.
First-time house buyers are getting older
Research shows that the average first-time buyer in the UK is now 30 years of age or older, which is 7 years older than in 1960.
In 1960, the average first-time buyer at 23 years old, needed only to pay £595 as down payment. Today, the average first-time buyer will need to save around £20,000 and pay a deposit of £20,622 to be able to own a house. If current property trends continue, this amount will increase as property becomes more valuable in future.
Researchers found that homebuyers in the 1960s spent only two years saving money for their deposits with an average household income of £2,854. Those who bought houses since 2011 spent more than five years saving as deposit amounts kept increasing. As a result, 48% had sought financial help from their parents.
Recently, yet another report noted that the average single first-time house buyer would need just over 10 years to save for a deposit to buy a house in the UK. Single first-time buyers who just started saving this year would struggle to put together a 15% deposit before the end of 2028, while couples only need five years.
In London, however, it take first-time buyers 17 years to put down a 15% deposit by 2035, despite house price falls due to Brexit. Goes to show how inflated prices in the UK’s capital city have become as a result of housing supply unable to cater to a growing population.
In Australia, the typical age for first-home buyers has increased from 27 years old in the early 1990s to 29 years old in the early 2000s. As at 2017, the average age has increased to 31 years old, with around 20% required as deposit.
Meanwhile, in Malaysia, there is high demand for rental property among millenials as only 33% of them can afford to buy a house due to escalating property prices and slow income growth.
Clearly, home ownership is becoming a big challenge for the young people all over the world. Bad enough that they would have to wait so long to own a house as prices keep rising, what more the taxes they would have to pay later on?
Buy-To-Lets Make Profitable Investments
Millennials especially in the UK and Australia are choosing to rent while saving to own a house. Even more are opting to abandon the idea of homeownership entirely, preferring to rent instead. Renting and partial homeownership is easier, as well as cheaper, and certainly more favourable compared to a mortgage payment, especially if it means living in convenience.
This offers a great opportunity for profit in the buy-to-let market as landlords stand to receive good and regular income from rental property.
Just a day or two ago, we talked about the Manchester housing market stealing the limelight from London. Here’s a peek at what makes Manchester the amazing city that it is.
Manchester, UK, might best be known for being the world’s first industrialised city — besides being home to just a couple of popular football clubs, of course. Once a manorial township with peasants working the field for the Lord of the Manor, the city of Manchester is now renowned for being one of the most modern cities on Earth following a multitude of revolutionary discoveries.
Manchester began expanding “at an astonishing rate” around the turn of the 19th century as people flocked to the city for work from Scotland, Wales, Ireland and other areas of England following a boom in textile manufacturing during the Industrial Revolution. It developed a wide range of industries, so that by 1835 “Manchester was without challenge the first and greatest industrial city in the world.” — Cotton spinning was Manchester’s specialty; it made them the largest marketplace for cotton goods!
Fun fact: In Australia, New Zealand and South Africa, the term “manchester” is still used for household linen: sheets, pillowcases, towels, etc.
Manchester went on to accumulate a fair share of world firsts: the world’s first IVF baby was conceived in Oldham, Greater Manchester in 1978, the atom was first split and graphene first isolated at the University of Manchester in 1917 and 2004 respectively, the first stored program computer was also built in the University of Manchester in 1949 — these groundbreaking milestones were reached in just one city, three of which occurred in one building!
Fun fact: The University of Manchester has 25 Nobel Prize winners. This has landed them in the top 25 schools with the most Nobel-winning affiliates!
Manchester is known as the UK’s 2nd largest city and is also the third-most visited city in the UK, after London and Edinburgh. Additionally, in 2014, the Globalization and World Cities Research Network ranked Manchester as a beta world city, the highest-ranked British city apart from London. Manchester was also touted UK’s Most Liveable City in 2013 according to the Global Liveability Survey.
A colossal amount of money has been put into Manchester’s development as part of the British government’s Northern Powerhouse push. Starting from 2017, £1 billion will be spent to transform the Manchester airport, further establishing Manchester as one of the most connected cities in the world. The city already boasts direct connections to many of the world’s major capitals, like New York, Hong Kong, Singapore and Beijing. The project is set to be completed by 2023. Another development in Manchester’s transport system is the new High Speed Rail (HS2), still under construction, which will cut travel time between Manchester and London from the current 2 hours to just over an hour when it is ready, and, in its second phase, also reduce the time required to travel to Birmingham and Leeds. The first phase of the £56bn railway is due to open in December 2026. The onward legs to Manchester and Leeds is set to open by 2032-33.
In addition to Manchester’s connectedness is its technological growth — Manchester is Europe’s second largest creative tech hub! With a GVA of £4.1 billion, 82,300 people working in creative and digital companies and over 7500 creative and tech companies, Manchester is a place where creativity and technology are jointly driving the next wave of innovation.
Supporting Manchester’s digital expansion are the four leading universities in the area. These establishments have a proven track record for collaborating with production on ground-breaking research and development in areas from health to data analytics, cyber security, text mining and cloud computing. The universities also produce a constant stream of highly-skilled computer science graduates which further bolsters the industry.
With all these ranks and progress, it is no surprise that Manchester’s property market flourishes just as much. Manchester registered a 7.3% increase in house prices over the entirety of the year 2017 following an undersupply, topping the list of all cities in the UK. Manchester has also topped the list of the best UK property hotspots in 2018 according to The Property Hub — in a recent Property Hub podcast, they discussed how Manchester is becoming the “London of the North”.
Here’s a video that captures Manchester’s essence:
Found below is a short recap denoting Manchester’s success:
Birthplace of the Industrial Revolution
Where the world’s first IVF baby was conceived
25 Nobel prize winners
Where they split the atom and isolated graphene
Where the world’s first stored program computer was built
Population of 2.7 million people
Over 200 languages
With 50% growth in the last 10 years, Manchester is the UK’s fastest-growing city and Europe’s second largest creative tech hub
Around 70,000 people now work in the city’s creative, digital and tech industries
A rich talent pool of over 110,000 thinkers from four leading universities
Between 2015 and 2017, over £1 billion was spent on the city’s infrastructure
Direct flights to many of the world’s cities, e.g. New York, Hong Kong, Singapore, Beijing etc.
Called the UK’s second city
Global exporters of world-class culture as well as technology; a city united by a passion for sport and music
One of the world’s best places to visit in 2015 — the only British city to be given this accolade by the New York Times
Home to some of the world’s biggest brands which contribute to Manchester’s £50 billion economy
To add to Manchester’s already exceptional list of prosperity are several interesting facts:
Chetham Library, Long Millgate which opened in 1653 and is still open to public today, is the oldest free public reference library in the United Kingdom
A car fuelled only by coffee grounds, nicknamed the ‘car-puccino’, constructed in Manchester made a trip from London to Manchester in 2010
Manchester is the only place in the world where you can obtain a degree in ‘Mummy Studies’ – the University of Manchester has facilities to enable the study of ancient Egyptian mummies
Emmeline Pankhurst, the leader of the Suffragette movement in the UK, was born and raised in Moss Side, Manchester
With Manchester’s rich history, participation in the digital age, expanding transport system, flourishing property market and more, one would be regretful not to see how they can get involved with this blossoming city. Manchester’s property market in particular, following a housing shortage, would be most advantageous for investors looking for the next big thing.
Saving hard, but you can’t quite put aside enough? Thinking of putting your money to work by investing in UK?
Here are 4 things you should know before deciding where to invest. Invest in property located in areas with
Stronger and stable economy
Rapid job growth
Vast education opportunities
This impacts the returns on your investment apart from increasing the value and ‘rentability’ of your property. Capital growth is also key to property investment. The greater the growth in property value,, the bigger the total profits.
UK has always been a haven for property investors. But, as London property prices soar higher and yields go lower, property in the cities outside London are showing greater yield potential. The Brits, too, are starting to show interest in properties outside of London. Indeed, it is now the regional cities in which you should put your money! Before you decide where to invest, take a quick a look at HSBC’s annual research on rental yield around Britain. Thank me later.
The data shows Manchester leading the pack in rental yields, as well as several other locations with profitable returns.
But if it’s only London property for you, you might find this link helpful: http://bit.ly/1J5P4co
In September 2017, it was reported that London house prices had fallen for the first time in 8 years at a record drop of 0.6%. The capital was subsequently deemed the weakest performing region in the UK for the first time since 2005.
According to recent news from Acadata, house prices in London continue to plummet, extending a slump that’s seen the average property in the capital lose almost 2 percent its value over the past year.
It seems as if the great divide has materialized in the UK property market, separating London from other thriving cities. According to Acadata, while values continue to fall in London, they are growing in other regions apart from the southeast. Property-website operator Rightmove has released fresh data that supports the claim of major regional growth, showing that average prices have climbed to a new record of 305,732 in April, despite a drop in London. The shifting power dynamic in UK’s major cities is becoming apparent, as efforts in expanding housing, jobs, resources and investment are becoming increasingly concentrated in areas outside the capital.
Javad Marandi, a British businessman with investments in commercial and residential real estate points out what is increasingly becoming obvious: “The best regions to invest in lie outside the capital – it’s no longer all about London.”
London Is Falling; So, What’s Rising?
Various lists claiming the emergence of “the next London” have penetrated the news, using undersupply and rental yields to gauge where, exactly, business in the UK property market is shifting. What investors know when it comes to such lists, is that repetition should lead them to the right places to invest their money.
Matt Stevens, Director of The Mortgage Genie, has recently shared that the buy-to-let hotspots set to offer the most competitive returns in 2018 are Manchester, Liverpool and Gateshead. Similar results were recorded in a more recent report released by JLL, which has singled out Manchester, Liverpool and Leeds as the “ones to watch” over the next five years, as it expects them to outperform other cities in the UK. The two constants found in both reports should signal to investors the immense potential in the northern UK region.
Manchester and Liverpool are serious players in the property market for their relevance as core cities for science and technological growth — this is partly credited towards the government’s push of the Northern Powerhouse.
Supporting Manchester’s title as ‘the Silicon Valley of Britain’ is a new report by Tech Nation, which has revealed that tech companies in the UK’s northern region have attracted investment at a faster rate than anywhere else in Europe over the past five years. Manchester particularly, was the key performer within the region, with tech investment growing at a whopping 668% over the 2012-17 period. This growth can be seen in the number of private equity firms in Manchester, which is 31 as of now, with a further three rumoured to be opening this year compared to the six to eight firms in the city over the previous two decades or so.
Liverpool also holds a prominent position in the upcoming digital age, with the establishment of the Knowledge Quarter, placing it on the cusp of becoming a world-class destination for science, innovation, education, technology and the creative and performing arts.
Recent news highlights an ecologist and astrophysicist from Liverpool John Moores University (LJMU) who, together, have made a significant breakthrough in the animal conservation scene. Dr. Claire Burke, the astrophysicist behind the new species-saving instrument, explains that the software used to identify galaxies is now being used to resolve problems involved with the tracking of endangered species!
With the northwest region boasting expansion in relevant industries, investors will find that their best bets lie in cities like Manchester and Liverpool.
Ultimately, the UK remains a good and safe place to invest your money due to a weakened pound and a structural housing undersupply. The best opportunities undoubtedly lie in major regional cities such as Manchester and Liverpool.
That said, it is important to note that the market in London, subject to a variety of conditions, will eventually bounce back, just as the housing market in the Midlands* bounced back from a low in 2015 to become one of Britain’s fast-growing housing markets today. On a positive note, it is during these apparent slumps that shrewd investors should invest in order to receive satisfying returns when the market bounces back.