With London becoming increasingly expensive for investors and returns not stacking up, many more are choosing to look north. But what, apart from price, is attracting them?
Brock Carmichael has been a contributor to North West Business Insider’s ‘Talking Property’ section each month for over a year now. We are asked for our opinions every month on a range of topics. This was March’s.
Chris Bolland, Partner
“London’s population currently stands at 8.8 million with population growth expected to remain stagnant in the coming years. Landlords expect an average rental yield of 3.6%. Manchester’s 2.5 million population is expected to rise steadily, with buy to let investors gaining an annual rental yield of 7.9%. According to HSBC, Manchester is the UK’s number one location for rental returns.
I would add that London is becoming both expensive and risky. Manchester’s GVA is forecast to increase by 2.4% by 2020, ahead of London, and land value and property prices continue to rise against London’s falls. Smaller cities in the North West are doing well too, so these benefits are rippling outwards.
Successful regions have a well-tuned balance between employment levels, investing in infrastructure and high-tech, jobs generation, available housing and active plans for further development to plug existing and forecast gaps. They also address the ‘brain drain’ of graduates leaving the region, which we appear to be doing here in the North West.
High profile relocations help support the positive image of the North; the now established BBC and ITV within Media City at Salford Quays will be followed by HM Revenue and Customs’ new Liverpool “super” contact centre and there are lots more.
Events like MIPIM help us raise the North West’s profile with investors and reinforce the positive messages about being here. That’s why we continue to support it, attending with a number of delegations and all three partners.”
John Cassell, Partner
“North West quality office space, development land, housing and property cost, construction cost and most certainly our consultant / professional fees are more favourable.
A move up North can be a significant step up in lifestyle for the ‘mover’, a terraced house swap for a quality detached house, a shorter commute, more time available for the family, plus the advantage of stunning scenery on the doorstep. There is a readily available and established skill base in North West Cities and the City Regions for office administration, financial services, manufacturing, biosciences and technology. Our excellent Universities attract young talent that now wish to remain here. The explosion of new city centre apartments increases the critical mass, which alone makes the regions more attractive.
Although there is a proven disparity between the North and the South relating to government investment in infrastructure, the advent of HS2 and Northern Powerhouse will help redress the balance and encourage inward investment.
We must have politicians that continue to fight for a bigger share of government investment so we have a well-rounded offering for those selecting to invest in the North.”