Despite the issues of Brexit, Northern cities have continued to perform above the national average. We look at why Manchester is becoming an obvious choice for investors and the economic and population growths.
Peter Scully | 4th September 2019
The issue of Brexit continues to hang over the UK like a rain cloud which will neither burst nor disperse. In the absence of any clear idea of what is going to happen, astute investors will actively look for investment areas which have an above-average chance of thriving regardless of whether or not Brexit happens and, if it does, regardless of what form it eventually takes. Manchester is an obvious choice.
Here are two reasons why and what they mean in practice.
Manchester is forecast to offer steady but appreciable growth from now until at least 2023. In particular, its gross value added is projected to rise by 2.9% per annum and its employment rate is projected to rise by 1.4% per annum (both figures from JLL Residential Forecasts).
Part of the reason for such robust projections is that Manchester’s economy is diversified both in terms of sectors and in terms of market reach. According to figures from MIDAS, in the five-year period from 2010 to 2015, over half (53%) of foreign direct investment in Manchester came from outside Europe. The biggest chunk of this (30%) came from North America.
Investors could tap into Manchester’s solid economic prospects by investing directly in companies with a significant presence in Manchester. Alternatively, and perhaps more practically, they could invest in commercial property, particularly office space, for which there is huge demand.
In fact, in 2018 over a quarter of new office space was let while it was still under construction, as compared to about 10% in 2017, (both figures from Deloitte Real Estate). This trend seems set to continue, especially since increasing numbers of major companies are establishing a presence in Manchester. New arrivals in 2018 included Amazon, Booking.inc and HPE.
According to figures from JLL Residential Forecasts, Manchester’s population is forecast to grow by 1.1% per annum until at least 2023. This headline figure, however, only tells part of the story.
Manchester’s population growth has been fuelled mainly by young adults, especially students and skilled young professionals. In short, Manchester has always been popular as a student destination and its popularity has been steadily increasing over recent years as young people have become more and more aware that Manchester is a place where they can not only get a great education without breaking the bank, but also enjoy an attractive lifestyle and tap into excellent career opportunities.
This means that not only is Manchester growing in prestige as a student destination, but that many former students are opting to stay in the city after graduation. Additionally, increasing numbers of people are returning to Manchester after studying elsewhere or making the “Millennial move” from the south of England in search of more affordable homes.
Investors have a number of options for establishing a presence in the robust Manchester property market. In particular, they have the option to choose between, what is technically commercial property, (purpose-built student accommodation) and standard residential property.
They also have the option to buy new-builds off-plan or after completion or to take advantage of Manchester’s very reasonable prices for existing property (including period property) to build up a buy-to-let portfolio.
If you would like to discuss any property investment opportunities or are looking to sell your investment, feel free to call us on 0161 660 5262 or email us on firstname.lastname@example.org