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UK Property Outlook 2019

As we enter into 2019, Brexit remains the biggest question for UK property investors — whether there will be a deal, no deal, or no Brexit.

The option of Remain seems off the cards, and despite the recent rejection of Theresa May’s deal by Parliament, we think that the risk of a no-deal is unlikely. Few MPs want such a drastic breakaway, and many will start to get antsy as the deadline fast approaches.

It is almost certain that some form of deal will be hammered out, at the very least to allow for a transition period after March 2019. This will allow time for free trade agreements to be worked out with the rest of Europe.

 

The UK housing market giant

The UK housing market as a whole soared to record highs in the past few years. Research by property firm Savills showed the total value of UK housing stock had increased by £190 bil to its highest level ever — a mind-boggling £7.29 trn.

“Our analysis demonstrates the scale of the housing market and underlines the importance of housing to the economies of London and the UK as a whole, both as an asset class and store of private wealth,” said Lawrence Bowles, residential research analyst at Savills.

Growth of UK market 2008-2018 (Source: Savills)

Unlike the 2008 financial crisis, where market values remained relatively stagnant until 2013, the UK housing market continues to grow in the face of Brexit. Growth pushed up by 2.7% in 2018.

“It’s great that we’re seeing more housing delivery, but development will have to make up a much higher proportion of new housing value if we are to come anywhere near building the homes this country needs,” Mr Bowles added.

Right now England is facing its biggest housing shortfall ever, with a backlog of 4 million homes.

Total housing need in England (Source: Heriot-Watt University)

 

Compelling reasons to invest

Advisory firm Ernst and Young forecasts an upward trend for the UK’s GDP, predicting growth by 6.9% from 2019- 2022.

Predictions for future earnings and inflation in the UK (Source: Ernst & Young)

Spending power will also start to increase this year as earnings are expected to rise by as much as 3.0% while inflation is predicted to drop to 2.0%.

Once a deal has been struck, the British pound is expected to go up. Property firm Colliers International predicts a 5% to 10% appreciation in value, while global assets manager Aberdeen Standard Investments says the sterling might potentially climb by 15% from its current level within 3 months of a deal.

Recovery of the pound will slow inflation and lead to stronger income growth that will support prices. The high-end residential sector will benefit from greater certainty by foreign expats working in London and the preservation of the UK’s financial services sector.

Savills forecasts UK house prices to rise 14.8% from 2019-2023, although there will be significant regional variation.

Where in the UK should investors look to gain the most in 2019? The timeless advice is to look for cities with strong fundamentals, e.g. a thriving local economy and industry. Three UK cities in particular that we recommend investors to keep their eyes on this year are London, Manchester, and Birmingham.

 

London

Property in the capital now makes up a quarter of the total UK housing value. A decade ago, it was just a fifth of the domestic market.

The London market is now worth a stunning £1.77 trn, over four times the combined value of Birmingham, Manchester, Edinburgh, Glasgow, Cardiff, Bristol, Liverpool, and Sheffield — all cities which saw higher rates of price growth than the capital in 2018.

The city may have experienced a slowdown since the Referendum, but that has not deterred overseas investors. London was the top city in 2017 globally for cross-border office investment, ahead of New York, Frankfurt, Berlin and Paris.

Last year saw nearly one in five (18%) new-build homes in London being purchased by overseas investors, 61% of which hailed from Hong Kong, Singapore, Malaysia and China.

Property firm JLL expects a bounce back after Brexit. Adam Challis, head of residential research at JLL, says that values will nudge up next year before accelerating faster with a greater sense of job security.

“Once we have confirmation of a deal and a reasonable transition period, people will start to feel more confident and this will encourage homeowners and investors to buy again.”

JLL predicts that the average price of a new-build home in Zones 1 and 2 will jump 17.6% between Brexit and 2023, making central London property a good buy for investors right now.

House price growth will be driven by the escalating supply crisis within the capital. Housing starts are expected to remain around 20,000 units a year over the next three years, and begin to rise towards 25,000 a year by 2023. This falls a long way short of the Mayor of London’s target of 66,000 new homes per year.

 

Manchester

The housing market is booming in the UK’s ‘second city’. Greater Manchester’s population has surpassed 2.7 million, and is predicted to rise to almost 3 million by 2031, with the City of Manchester alone accounting for 36% of the growth.

The Government projected that if house-building efforts do not catch up with projected growth in households, there could potentially be 1,500 more families than homes in 2026 — and 9,400 more by 2037!

Anthony Stankard, from agents Reside on Deansgate, said: “People follow jobs, and the strength of Manchester and the city region is in its continued economic strength.

“The airport, together with Airport City and MediaCity are key factors, but underpinning it all we have the universities. The newly announced Faculty of Science (of Manchester Metropolitan University) alone will provide enough jobs on its own to fill a couple of residential towers.

“And what Manchester has – and what cannot be replicated – is an energy. And the demand we are seeing just keeps on going up.”

With the the new High Speed Rail (HS2) due for completion in 2026, Manchester will be eight minutes over an hour from the capital.

Data from Hometrack showed Manchester at the number one spot among all UK cities, with a price growth of 6.6% in the 12 months to November 2018.

Houses in the city are priced at an affordable average of £168,900, just over a third of London’s £481,800.

JLL predicts house prices in the city will go up by 14.5% from 2019-2022, whilst rental growth is expected to reach 13% over the same time period.

England’s top 5 cities for price growth in the 12 months to Nov 2018 (Source: Hometrack)

 

Birmingham

Birmingham’s position at the heart of the UK plays a major part in the city’s ever-growing attraction as a hotspot for business and manufacturing.

According to a study by consulting group PwC and think tank Demos, Birmingham is the fastest improving city in the country to live and work in. Falling unemployment and a wave of regeneration projects boosted the city to its place at the top.

A torrent of regeneration started in the city after it won the bid to host the 2022 Commonwealth Games, with developments such as Birmingham Smithfield, Arena Central, Paradise, and the Midlands Metro extension currently underway.

Birmingham also has the honour of being the youngest city in Europe. Out of a population of 1.1 million, nearly 46% is estimated to be under the age of 30.

The city’s youthfulness and strategic location have made it a hotbed for start-ups. The city consistently had the highest number of start-ups in the country outside of London since 2016.

Once the HS2 is complete, Birmingham will be a mere 49 minutes away from the capital.

Data from Hometrack showed Birmingham at second place among cities in England, with a price growth of 6.3% in the 12 months to November 2018.

Houses in the city are priced at an average of £163,600, which is slightly less but on par with Manchester.

JLL predicts house prices in the city to go up by 15% from 2019-2022, with rental growth expected to reach 13.5% over the same time period.

The British pound is set to rise quickly, which means property investors can get better returns by buying now. Don’t miss out! If you are looking for property in the cities of London, Manchester, Birmingham and more — give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com!

If you would like to read more on property in the UK and Australia, check out our Investment Guide here

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Article by Ian Choong 
Edits by Vivienne Pal

Sources:

  • https://www.bbc.com/news/business-39732816
  • https://www.savills.co.uk/insight-and-opinion/savills-news/273857/uk-housing-stock-gains-%C2%A3190-billion-and-hits-a-record-%C2%A37.3-trillion-valuation
  • https://www.savills.co.uk/insight-and-opinion/savills-news/170245-1/savills-forecasts-uk-residential-market-in-the-next-5-years
  • https://www.hometrack.com/uk/insight/uk-cities-house-price-index/
  • https://www.manchestereveningnews.co.uk/news/property/buying-investing-property-manchester-centre-14951935
  • http://residential.jll.co.uk/insights/research/regional-residential-forecasts-2018
  • http://residential.jll.co.uk/insights/research/residential-forecasts-west-midlands-report-2018
  • https://www.theguardian.com/uk-news/2017/nov/07/birmingham-uk-city-oxford-reading-pwc-demos
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Making a Difference Together

“Making A Difference” is a motto that has long been synonymous with CSI Prop, and one that is about positively affecting the lives of others through the opportunities we seize.

The CSI Prop Investor Club series was created with this intent in mind. Every year, we organize several Investor Club events as an exclusive platform to bring clients together to learn, network and share in the spirit of togetherness.

In keeping with the yuletide season and to end the year on a high, our final Investor Club event of the year was a relaxing and meaningful one, spent with 80 VVIP’s from two orphanages — Rumah KIDS and United Learning Centre (ULC). The objective of this day was to share a platform with our investors to make a difference in the lives of these children in the spirit of paying it forward.

Held at mmCineplexes in e-Curve, it turned out to be a day filled with fun, fellowship and good food, which culminated in a screening of Disney’s The Nutcracker and the Four Realms. It was a movie perfect for people of all ages.

Taking it a notch further, we partnered with The Picha Project, a social enterprise empowering marginalized communities in Malaysia through a sustainable food delivery and catering business. The food, lovingly prepared by refugee families from various countries, provided a mouth-watering cultural experience for all while also generating revenue for The Picha Project and their cause.

Guests purchasing gifts by way of donation for the gift exchange session.

Guests arrived bright and early with gifts in tow for the gift exchange session; some even purchased extra gifts by way of donation at the registration counter. Donations collected that day — a total of RM400 — were split evenly between the two homes.

To get our clients acquainted with the children, we played an interactive game with 5 attractive prizes up for grabs. The lounge was filled with lots of laughter as employees of CSI Prop also joined in the excitement and basked in the joy.

The adults and children excitedly trying to finish their tasks during games time.

After the fun-filled activity, the best thing to do was to regain the lost energy, hence, lunch was served. Everyone indulged in the scrumptious food, and the bonding between the adults and children continued.

Our team members having a good time with the kids.

It was truly mesmerizing to watch our investors connect with the children, and to see the faces of each child light up in return at the excitement of having met someone new.

Suzanne shared how kindness and hard work shaped The Picha Project.

Suzanne Ling, the co-founder of The Picha Project then shared her inspiring story of how The Picha Project came about, and the struggles they underwent in order to make it work. Hers was a story that portrayed the significance of kindness and hard work and that every successful journey starts with one little step.

Everyone buckled up for the movie

The day ended on a high note when everyone adjourned to the cinema to watch the movie. Each of us went home with a smile on our face, and gratitude and contentment in our heart, knowing that we added joy in the lives of these children — even if it was just for a day.

Check out our video below!

By Lydia Devadas Michael
Additions and edits by Jagdeep Kaur

Missed out on the last Investor Club event? Stay tuned for our next one and wait for your invitation via email! CSI Prop’s Investor Club is an exclusive community for our clients.

 

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Construction Update – One Wolstenholme Square (Nov 2018)

On behalf of the developer, we provide you with the latest images and information as of November 2018 from the One Wolstenholme Square construction site in Liverpool, UK. Kindly click on the image below to access and flip through the update.

FLASHBACK: The Epicentre of History & Culture

Imagine being at the centre of a quaint and cultural city bustling with life and steeped in history…Welcome to One Wolstenholme Square, the latest £40 million development in the most desirable postcode in Liverpool.

Located five minutes away from the city’s attractions and top university campuses, One Wolstenholme Square comprises a selection of studio and one-bedroom residential apartments with a panoramic view of the Liverpool skyline and the remarkable World Heritage Waterfront.

Liverpool is one largest economies in the UK, and home to half a million people, some of the UK’s top universities, football clubs (Liverpool FC & Everton FC), a staggering student population of over 53,000 and, of course, The Beatles!

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 (MY) 3163 8343 (SG)

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Construction Update – One Islington Plaza (Dec 2018)

On behalf of the developer, we provide you with the latest images and information as of December 2018 from the One Islington Plaza construction site in Liverpool, UK. Kindly click on the image below to access and flip through the update.

Flashback: One Islington Plaza

Living in the Knowledge Quarter

One Islington Plaza is the latest student development directly adjacent to Liverpool’s Knowledge Quarter, in the heart of Liverpool’s student district. One Islington Plaza will consist of 317 studio and ensuite clusters, with great facilities for student living such as communal lounges, entertainment and services. All ensuites have access to communal kitchens with appliances, including dishwashers, while all studios come with fully-fitted kitchens. The project is situated in an incredible location, within walking distance to major universities in Liverpool.

Investment Highlights

  • Prime Location
  • 8% rental returns assured for 3 years
  • NO stamp duty
  • Fully-managed
  • Fully-furnished

Project Highlights

  • On-site concierge & front desk
  • Communal lounge with flat screens, video games, pool tables, ping pong & fuzzball
  • Cinema, media room & study areas
  • Laundry services
  • Bicycle storage
  • Fully-equipped gym
  • On-site Crosby Coffee shop & retail unit
  • TVs & high-speed broadband in all rooms
  • Hotel style access control systems & monitored CCTV system


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 (MY); +65 3163 8343 (SG)

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Construction Update – Lightbox (Dec 2018)

On behalf of the developer, we present to you the latest updates from the construction site of Lightbox in Sheffield, UK, as of December 2018. Kindly click on the image below to access and flip through the update.

Flashback: Lightbox

The Heart of Sheffield

Lightbox is a landmark living space set at the heart of Sheffield’s thriving creative Hub and the Cultural Industries Quarter, a short walk away from Sheffield Rail Station, the Crucible Theatre and Sheffield Hallam University.

Units come fully-furnished with premium fixtures and fittings, complete with the latest appliances. Amenities like the dedicated concierge, on-site gym, ground floor café/restaurant and residents-only cinema will certainly appeal to its discerning tenants.

Project Highlights

  • 1 – 2 bedroom, and studio units
  • Fully-furnished
  • Dedicated concierge, café/restaurant, on-site gym and residents-only cinema
  • Suitable for both students and young professionals
  • Car park spaces available

Investment Highlights

  • Prime location
  • Fully-managed
  • 8% p.a. nett returns
  • 3 years assurance
  • Up to 17.5% discount*
  • Completion in Q1 2019 July 2018
  • Price from £83,000

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 (MY); +65 3163 8343 (SG)