Manchester sees record house price growth throughout the UK

Investors know that mature markets tend to offer reliable yield, but if you want the prospect of the best returns, you need to look for the new, emerging markets.  While London is the UK’s biggest city and therefore its biggest, single housing market, regional housing markets are currently showing more potential for growth and Manchester is leading the way.  There are several reasons why this is the case.

Manchester is already the Northern Powerhouse and is still growing economically

Long gone are the days when the north of England was synonymous with high unemployment and every social issue you could name.  Manchester has been the focal point of the Northern Powerhouse initiative and is now a vibrant and dynamic economy which is still growing.  In addition to being home to some of the UK’s major sports teams (including two of its top football teams), it’s become a major arts centre, a hub of the digital economy and home to a large student population.  Its infrastructure is also excellent and is continually being improved, which means that it offers a superb base for companies which want access to the whole of the UK and overseas as well.

There is a current lack of supply but relative affordability

The restricted supply of housing is an issue in Manchester as it is in other parts of the UK, which, of course, encourages house-price inflation.  At the same time, however, house prices are coming off a much lower base than in London, which means that prices are still very attractive, especially when compared to the south east.  Put that together with a thriving economy and affordability is much less of an issue than it is in the Thames Valley area.

The Brexit situation is less of an issue

Article 50 has just been triggered and has presumably signalled the start of two years of negotiation, the result of which, at this point, is anyone’s guess.  Given the uncertainties over what will happen to the financial service sector’s ability to operate in the EU, it is understandable that the London housing market has seen reduced house-price growth.  While London is a robust city in every sense of the phrase and is likely to continue to perform well regardless of what form Brexit eventually takes, the housing market is likely to be somewhat slowed by a percentage of people who would otherwise be first-time buyers or movers, adopting a “wait-and-see” approach until it’s clearer what way the wind is blowing.  This is less of an issue for Manchester property investments, where financial services plays a much smaller role in the local economy.

There is increasing interest from overseas

Anyone who pays attention to the currency markets (or just the news headlines), will have noticed that Sterling has been on somewhat of a bumpy ride recently.  The devaluation of Sterling is great news for international property investment from overseas, as it means that Sterling-denominated assets, such as property, become more affordable in real terms.  London has long been a key destination for overseas investors, but over recent years, international buyers have also moved into the regional markets, for exactly the same reasons as their UK counterparts.