I spend a lot of my time looking at the UK property market and trying to identify up-and-coming areas for investment. While London will always be a top choice for investors, today it seems clear that many of the UK’s up-and-coming areas are located further north. Here is a selection of areas in the UK that have caught my interest this year.
Manchester
Manchester city centre has been vastly transformed over the past few years into a burgeoning employment hub with excellent transport links and a vibrant social scene. According to JLL, by 2021 Manchester will have 10,000 more office workers that it did last year, with many of these in the tech sector. Office take-up last year totalled more than 1.76 million sq ft, a 54% increase on the 10-year average. And in the residential market, low stock levels and high tenant demand among young working professionals have led to a significant rise in rental yields. Along with job creation, large scale regeneration projects helped by more inward investment deals than any other major regional city has also been a contributing factor to the city’s rising market.
Birmingham
Over the past year, house prices in Birmingham have risen faster than any other UK region. This isn’t surprising since once HS2 begins operating in 2026 Birmingham will become one of the most well connected cities in the UK. The city also hosts 32,000 businesses and its 1.1 million population is expected to grow by 200,000 people over the next 20 years making it a very attractive investment prospect. Birmingham’s attractiveness for investment was recently demonstrated by Gulf Islamic Investments’ acquisition of Priory Court & The Lewis Building for £140m, the largest UK office transaction outside London this year.
Leeds
Leeds has seen very little new supply over the last ten years due to a huge amount of new supply that came to the market in 2008, just as the economy collapsed. The thousands of new apartments saw little demand and there was a huge amount of oversupply. But now, the population of Leeds is growing seven times faster than London and due to the perception that there has been an oversupply of housing, and therefore very little construction, there is now an under-supply. Leeds City Council has suggested that there is room for 20,000 more homes in the city centre in order to keep up with current demand. The office market also seems to be moving well with Westcourt Group recently buying two Grade II listed office blocks with 25,000sq ft of space on Wellington Street. For those with a long term outlook, Leeds is also set to benefit from a HS2 station in the project’s 2b phase expected for completion in 2033.
Hackney
In London, Hackney has recently been named by Rightmove as the most in-demand borough for homebuyers. While the London market has stagnated somewhat as Brexit uncertainty continues, prior to the slump, house prices in Hackney rose by 568% since their 1998 levels, more than any other local authority in the UK. This dramatic price growth has been fuelled by good transport links such as the East London Line, green spaces like Victoria Park and new restaurant and bar openings.