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Manchester: Best Property Investment Yields

In Part 1 of our Manchester series, we discuss the facts & figures that make Manchester THE top city for investment in the UK. The numbers don’t lie.
Photo credit: Select Property Group

The investment landscape in the UK is changing. The focus has moved from London as the go-to destination for investment and the UK’s largest economic gains, to Manchester.

With the highest yields and critical undersupply of housing in the Northern Powerhouse on the back of significant investments by the government, Manchester’s growth is just beginning. Today, Manchester is at the top of the league in annual rental increases in the UK and, with a rapidly expanding population comprising greatly of the youngest demographics in the country, Manchester is the best place for property investment.

In fact, property advisor JLL has predicted that house prices in Manchester will increase by 26.4% in the next 5 years, with 5.5% growth over the course of 2016.

Trust the facts. Here are 10 reasons why you should invest in Manchester:

Manchester has secured £8.2 billion of investment over the past decade, more than Birmingham’s £6.5 billion or Glasgow’s £5.3 billion – CBRE, Jan 2016

2  HSBC ranked Manchester as the UK’s no. 1 city for property investment yields in 2015, thanks to average annual returns of 8% – HSBC, 2015

3  Since 2010, average annual yields in Manchester have risen by 6.02%, the highest in the UK. In comparison, yields in London rose by just 4.71% during this period

4  Manchester named as UK’s top property investment hotspot in the next decade – House Simple

5  Manchester is a young community, with over 60% more 25- to 29-year-olds living there than the national average. These people need rental accommodation – Manchester Property Guide 2015

6  Manchester has a higher job growth rate than London, recording a 47% increase job advertisements in April 2015 alone compared to 42% in London. 70,000 new jobs will be created by Greater Manchester’s financial and professional services sector by 2025 – CV Library & BNY Mellon

7  Manchester was named the best UK city to live in for the second consecutive year – EIU Global Liveability Survey 2015

8  Manchester’s population expected to grow by 125,000 to 2.87 million in the next decade – ONS

9  With the redevelopment of transport systems, more than 15 million people can reach the city in less than 45 minutes by 2025 – up from 7 million currently – BNY Mellon

10  Greater Manchester to get its own directly-elected mayor, with the region receiving £1 billion worth of devolved powers from the UK government. This will enable Manchester to hold new freedoms to better control its own budgets and will be able to dictate which areas need the most investment on a regional level.

In Part 2 of our Manchester series, we explore the influx of Generation Y in the city and how it contributes to greater demand for rental housing. Stay tuned!

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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UK Student Property in 2016

Phase II of London Spring Place which launches in Kuala Lumpur end of February. Phase 1 sold out within the year of launch!

UK student property is the strongest investment platform today, surpassing other traditional real estate classes. In 2015, the UK student property sector saw investments to the tune of £6 billion – twice the amount invested in the sector in 2013 and 2014 combined. Experts say the sector is likely to see more investment in the years ahead.

UK Student Property

Formerly reserved for institutional investors, UK student property has become one of the most popular investment vehicles to date in the world of property investment. From a mere £500 million in 2010, direct investments in the sector reached £6 billion in 2015, surpassing the £3 billion in 2013 and 2014 combined. More significantly, this marks an increase of more than 300% over the £1.7 billion invested in 2014 alone.

Is Growth in the Sector Set to Continue?

The answer is yes.

The fact remains that there is still an acute under supply of purpose built student accommodation (PBSA) in the UK due to restrictions in building permissions, a challenging planning environment and the government’s support for housing development. Meanwhile, the number of foreign students continues to rise due to recently abolished restrictions in foreign student numbers, which comprise the traditional mix of new first year students and second- and third-year returners.

To illustrate, the number of foreign students at Britain’s top universities doubled between the 2005/2006 and 2013/2014 academic years. These students tend to come from wealthy families who are able to afford the soaring cost of tuition for non-European Union residents and demand a high-class standard of living. The Higher Education Statistics Agency reported that the number of residents living in private halls more than doubled between 2007 and 2014—from 46,000 to 102,000—a trend predicted to continue. The dramatic upswing has been fuelled by the inability of university-managed accommodation to keep pace with student numbers.

London’s full time student population alone is expected to rise by 50% in the next 10 years, whilst student cities, particularly where there is a Russell Group university, is expected to see dramatic increases in student numbers. EU and non-EU students are the fastest growing segment, bringing a net benefit of £2.3 billion per annum to London’s economy supporting 60,000 jobs in the capital.

But, beyond the fundamentally undersupplied market, one reason for the success of PBSAs is that students have become more discerning, especially in light of increased tuition fees. Unite Group reports that 85 per cent of second year undergraduates are now looking for quality, purpose-built student homes that fulfill all their needs (including peace and quiet and access to night life), and with the CBRE statistics showing that student accommodation generally has occupancy rates of some 99%, it’s easy to see why people put their money into this area of the market.

Conclusion

The structural undersupply in purpose built UK student property has caused prices to skyrocket. Student housing charity Unipol, for example, reported a rent rise of 25% in purpose-built student accommodation between 2010 and 2013 – nearly double the rise in the rental sector as a whole in that period (13%).

Experts predict that student housing will experience a continued strong demand but with significant supply side challenges in London and key student towns. With this demand from students for more luxurious space, coupled with rising student numbers and strained supply, there is certainly potential for all sorts of investors to get top marks for their shareholders and earn strong income and profits from the sector.

Global investment into UK student housing. Source & credit: Savills Research file:///C:/Users/Marketing/Downloads/spotlight–uk-student-housing-2015.pdf

Ultimately it’s not just about what you invest in; it’s also where you invest in. In a recent report in the Property Wire, several student cities were highlighted as the next investment hotspot including Manchester, Liverpool, Birmingham and Brighton. Looking ahead, it is also likely that London will continue to be an attractive city for students from across the UK and around the world. However, there is the risk that prospective students will be put off by the cost of living in the capital (house prices have risen by 46% and private sector rents by 19% over the last five years according to the ONS).

‘So long as demand outstrips supply, upward pressure on both rents and capital values will continue to make the market an attractive proposition for investors, and we don’t expect the market to come off the boil for some time,’ says CBRE head of student housing advisory Jo Winchester.

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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UK Property Outlook 2016

UK property outlook 2016. London at sunset. Credit: wikipedia

Summary:

  • Overall positive outlook across the UK, but central London growth subdued.
  • Growth in the Northern cities due to governmental initiative and overall affordability amid high growth
  • Student property remains a good investment option given structural under-supply

The year started on a bleak note, no thanks to the current global economic climate. On the property front, the beginning of 2016 in the UK was headlined by policies to be imposed by the Chancellor on home-owners and landlords,such as future tax and stamp duty increases, and the abolition of mortgage income relief in 2017 – all this on top of predictions of a rise in Bank Rates, prompting doomsayers to predict an extreme downturn in the property market with projections stretching to 2021.

Read how the rates increase affects the Malaysian investor here

But, let’s not get ahead of ourselves. Forecasts are essential in helping the investor strategize, but it is crucial to take a closer look and weigh the predictions against the facts and what we already know:

Raising taxes and other rates are usually measures used by the government to protect the welfare of its house-buying citizens by preventing skyrocketing property prices and overarching speculation resulting from uncontrolled property-buying by wealthy local and foreign investors. The CGT in Singapore and Hong Kong and the RPGT in Malaysia, as well as FIRB taxes and stamp duty hike in Australia are a good example. We’re not saying you should ignore it; we’re just saying it’s not a deal-breaker.

To illustrate, a survey by the Council of Mortgage Lenders found that despite the negative outlook, landlords are confident that they will be able to absorb the impact of tax changes while over 80% are confident they won’t have to raise rents in order to cope.

As for all that talk on Bank Rate increases: the trend for pushing forward forecasts for the rate rise into the future has been going on since rates were cut in 2009; the prediction keeps getting pushed back in the end.

Currently, Bank Rates stand at 0.5%; the prediction for a rise was set for Dec 2016 or Jan 2017 following the first rate rise in the US in 9 years, last December. But with the global economic gloom of 2016 and comments of the Monetary Policy Committee (MPC) along with dramatic market movements, money markets imply that the first increase is poised for Aug 2019. Bank of England chief economist Andy Haldane said last year that the case for UK raising interest rates was “some way from being made” and that negative rates may still be needed.


CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Investing in York: What the Experts Say

York is a quaint and picturesque city which has become a hot spot for property investment.

MENTION York and the first thing that comes to mind are cobbled streets, Georgian townhouses and medieval property steeped in Roman influence. Pretty. Idyllic. Serene.

But there’s more to York than mere charm. Property experts have touted York as the top rental cash cow in the UK — and it’s on paper, folks!

Investing in York?

CBRE released a report highlighting alternative cities for rental property investment (fig 1), and York is top on the list. Savills published a report of top 10 UK capital growth hotspots for 2015 – 2016 (fig 2) and York sits on top of the list – again .

Savills’ Top 10 Cities Capital Growth Hotspots 2015 – 2-16 Credit: Select Property
CBRE Top 5 Cities for Buy-to-let

The report cites that rental prices in York increased by a whopping 26% over 1 year, which is 7% more than the anywhere else in the UK (including London). Demand from students, who flocked to both of York’s universities (University of York and York St Johns University), and young professionals drove up monthly rents to £901pcm.

Why is York a Sought-After Market?

There is an excess of 21,000 students in York, but only 1,200 dedicated student beds available. York is experiencing a critical undersupply of student accommodation, which is why rental rates are rising and demand for student property is soaring.

This clearly supports our belief that London, while still presenting good capital growth (and particularly attractive for the cash-rich foreign investor), is overpriced and unable to provide the kind of rental yields that cities further afield are offering.

York’s housing supply is also limited by its natural beauty, national heritage and rich historic importance, thus making it a very sought-after market, and CBRE expects to see continued population growth there.

In summary:

  • York has been named as the UK’s highest performing property market & the best place to make a buy-to-let investment (rental property investment)
  • There is limited supply and strong demand for property from young professionals and students
  • Rents increased by 26% last year to £901pcm – 7% more than anywhere else in the UK
  • Average house price growth: 3% to £228,907

Video credit: Select Property Group

Basically, if you want short-term liquidity and rental income, York is another fabulous option for the savvy investor. What investment opportunities are there in York? Find out here.

More Reading:

  1. Buy-to-let Investors Should Forget London and Head to York
  2. The 5 Best Cities for Rental Growth
  3. Property Investment: The Superstar Agents Who Put Buyers First
  4. London House Prices Most Overvalued, Says UBS
  5. Investment by Degrees: The Growing Market for University Pads

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Time to Invest in Manchester

Planning to invest in Manchester? The £800m NOMA scheme near Manchester city centre spans 20 acres and when completed will feature four million square feet of offices, homes, shops and leisure amenities.The first phase of the project is a £100m headquarters for The Co-operative Group. NOMA will be developed over a period of 10-15 years.

EVERYONE loves London and wants to live in London. That’s understandable: after all, London is one of the world’s most historical cities and the capital of the world’s greatest empires of all time. It is also a cultural epicentre and one of the most exciting places in the world.

But #DidYouKnow that Manchester has been named by the Economic Intelligence Unit (EIU) as the best UK city to live insurpassing London – for the second year running?

Manchester has now become the UK’s powerhouse city – its fastest-growing to date, and the largest economic area outside of London with £56 billion gross value added (GVA) whilst London’s annual residential rent growth slows down with property prices hitting an affordability ceiling.

We are firm believers that the time has come to invest in Manchester. And here’s why:

 

3 REASONS TO INVEST IN MANCHESTER

1. Higher rental returns than London

With its population rising at three times the pace of the national average and exceptional transport links, Manchester is now the UK’s number one city for property investment. Average rental yields are 2.78% higher than the highest yielding London borough of Newham thanks to sustained demand for rental accommodation and one of the lowest levels of housing stock in the country.

According to Savills’ Matt Oakley, Manchester has the highest number of graduate retentions of any city in the UK. In 2014, Knight Frank’s Rental Revolution report states that rental return growth in Manchester increased by 5.27% – 13 times faster than yields in London.

Manchester has experienced capital growth of 21% in the last 18 months, with growing population and shrinking property supply forecast to drive property prices up by 22.2% over the next 3 years.

2. Government investments amounting to billions of pounds

The UK government plans to build an economic powerhouse in the north of England, with the creation of enterprise zones with favourable tax conditions and devolved local government powers designed to encourage investment.

To date, a £1 billion expansion of Manchester’s airport has been announced, which will drive an additional 10 million passengers annually, while connecting Manchester to more destinations around the world. Meanwhile, the construction of the HS2, the high-speed rail, will cut the journey time from Manchester to London to only one hour

3. Strong demand for short-term rental

The relocation of the BBC, ITV and Co-Op Bank headquarters to Manchester and the growth of NOMA reaffirm Manchester’s economic growth in the UK. As more corporations move their headquarters to Manchester, there will be positive job growth in the region, thus leading to a greater requirement for both long term and short term housing.

Manchester clocked the highest demand for property and accommodation with a short-term rental in the UK in June 2015.  About 43% of letting agents reported a significant increase in interest among prospective tenants in the region.

Manchester records about 10.3 million staying visits each year, with occupancy levels at hotels in the city hitting record levels in May 2015. This demand for short term accommodation has placed a strain on the already limited number of hotels and apartments in the city, particularly as more traveling business executives look for such accommodation types as the city continues to expand economically.

If you are looking for a viable investment in the UK, it’s time to start looking to Manchester. This city, with its huge student population and growing workforce, is definitely the place to plonk your pounds and pennies.

Call us at 03-2162 2260 or 016-228 8691 or 016-228 9150 for a chat. Our advice is free but valuable.

Additional reading:

  1. George Osborne intervenes to bring Chinese Premier & Investment into Manchester
  2. Chinese Agree Investments in Manchester
  3. PM Pushes China Investment in Manchester
  4. Manchester Rising as an Investment City

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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Student Property: Where in the UK?

Lifestyle: While centrally located digs matter to university students,  facilities like quality living space, high-speed bandwidth and communal sections that encourage optimum interaction are now highly ranked, too.

Where in the UK to invest?

If there’s one thing that has UK Inc. stamped all over, it’s Britain’s world-class education. Yep, British universities are in rip-roaring health as eager beavers continue to cram the hallowed halls of renowned UK institutions, while other industries suffer.

Knight Frank and Savills have both reported that student property now stands as the fastest-growing property sector in the UK, with demand consistently exceeding supply. Indeed. There are some 2.3 million students (and counting) in the UK now, and the number of international students is predicted to rise by 20% – 30% in the next 5 years according to the Department for Business, Innovation and Skills in 2013. These are amazing times for investment!

It is, however, crucial to invest wisely.

Putting your money in any old property located within minutes from a city area, isn’t the way to go. You won’t get great returns investing in student digs in townships where unknown universities are located. Conversely, it is cities like Birmingham, Bristol, Exeter, Liverpool, Manchester, Newcastle and Sheffield that have been touted as the best places to invest in UK student property. One common thread shared between these cities is that they each serve as the location for a Russell Group University. As a rule, universities that rise rapidly in the UK league tables attract higher enrolment, thus creating greater demand for accommodation. Ergo, the more renowned the university, the stronger the rental market.

Cambridge university students, for instance, are brainy and make formidable cash cows. The university is constantly expanding; the city population is expected to increase by more than 20 per cent in the next 10 years, driving the student rental sector in the area to boom. Newcastle is another example. The Higher Education Statistics Agency (HESA) has ranked Newcastle University (another Russell Group Uni) as5th in employability, top 12 for research power in science and engineering and 8th for medical research power. It is also one of the largest universities in the whole of UK with more than 31,000 students from 130 countries.

It is also prudent to invest in student accommodation built by credible developers that have vast experience in the business.  At the risk of being repetitive, we prefer developers that build where top universities are located, and with enough monetary clout to develop on a site that’s mere minutes’ walk away from universities, city centres and amenities – i.e. where demand is highest.

Purpose Built Student Accommodation

Which is why Purpose Built Student Accommodation (PBSA) has been increasing in popularity.As global, regional and virtual boundaries continue to blur, students want to remain connected. In this hurry-up world, they want to have anything and be anywhere, instantly. Research shows that students have become more discerning, and want to be treated like true customers. Thus, while prime locations matter, facilities like quality living space, high-speed bandwidth and communal sections that encourage optimum interaction are now highly ranked, too.

This bodes well for the mass investor market. PBSAs – formerly the domain of institutional investors – is now the focus of the smart individual investor because, with the right developer, the rewards are enormous. VITA Student, the luxury student accommodation development arm of UK’s renowned Select Property Group, has had 10 years’ experience in the market, with their projects fetching annual rental yields of up to 10% and guaranteed returns of minimum 7% for five years.

Thank you for reading this article, Student Property: Where In The UK? Please share it by using the social media buttons below.

Further Reading:


CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence. 

Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260