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UK Government Continues Focus on Northern Powerhouse

Categories:Reading and Research

The recent Autumn Budget clearly demonstrates the importance that the UK Government has placed in the Northern Powerhouse as the country’s emerging economic juggernaut. Allocations have been made into the transport and digital tech sectors, giving the northern economy a huge boost in jobs creation and population. Read on to find out why investments into the Northern Powerhouse makes sense.

The UK Government continues its momentum of rebalancing the country’s development focus, reducing its concentration in London and pushing it up towards the North. The importance of investing in the Northern Powerhouse to drive economic growth, has been recognised in the Chancellor’s recent Autumn Budget, with increased funding announced for infrastructure across the North.

The Northern Powerhouse, an initiative by David Cameron’s government, was established to boost economic growth in the North of England, particularly in what is termed as the “Core Cities”, namely Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle. Its aim is to reposition the British economy, shifting the traditional focus from London and the South East, to the North.

In the Budget, Chancellor Philip Hammond promised a £1.7bn Transforming Cities Fund to improve transport links between suburbs and cities outside of London. Half this amount will go to the six combined authorities with elected metro mayors, including £243m for Greater Manchester and £134m for the Liverpool City Region. The other half will go to the other cities by way of bidding.

The fund is designed to address weaknesses in city transport systems in order to spread prosperity by improving connectivity, reducing congestion and introducing new mobility services and technology. In practice, it will mean spending on improving buses, trams, cycle lanes and other initiatives in the regions.

In the Budget, Chancellor Philip Hammond promised a £1.7bn Transforming Cities Fund to improve transport links between suburbs and cities outside of London. Half this amount will go to the six combined authorities with elected metro mayors, including £243m for Greater Manchester and £134m for the Liverpool City Region. Image credit: HM Government
In the Budget, Chancellor Philip Hammond promised a £1.7bn Transforming Cities Fund to improve transport links between suburbs and cities outside of London. Half this amount will go to the six combined authorities with elected metro mayors, including £243m for Greater Manchester and £134m for the Liverpool City Region. Image credit: HM Government

Transport links are important to drive the regional economy, allowing growing businesses to tap into the local workforce. As the economy develops and cities expand, demand for housing will grow with the population increase it brings. This makes property a favourable investment to make, especially in the light of the severe shortage of housing in the UK.

Additionally, the fund will allow links between the new High Speed 2 (HS2) stations and local transport networks, complementing its development in improving movement throughout the regions.  The HS2 is a planned high-speed railway in the United Kingdom which is poised to be the new backbone of the national rail network, linking London, Birmingham, the East Midlands, Leeds and Manchester.

A sum of £300m will go towards ensuring that the HS2’s infrastructure can accommodate future Northern Powerhouse Rail and Midlands Connect services. This would enable faster services between the Northern cities of Liverpool and Manchester, Sheffield, Leeds and York, as well as towards the East Midlands and London.

Chris Grayling, the Secretary of State for Transport said: “Investment in transport is crucial to a strong and resilient economy. The Transforming Cities Fund will drive productivity and growth in cities where this is most needed, connecting communities and making it quicker and easier for people to get around.

“We have already seen the impact of better integrated transport links for both passengers and the local economy in cities like Nottingham and Manchester. This new fund will enable more English cities to reap these benefits, helping to deliver the opportunities and ambition of the Industrial Strategy across the country, as well as driving forward the Northern Powerhouse and Midlands Engine.”

The Industrial Strategy is Prime Minister Theresa May’s road-map for boosting productivity growth and encouraging investment in the UK, to help deliver a “stronger economy and a fairer society”. On the other hand, the Midlands Engine is the initiative to drive economic growth in the Midlands regions, in cities like Birmingham, Stoke-on-Trent and Nottingham — the Midlands’ equivalent to the Northern Powerhouse.

The Chancellor also announced additional funding for development projects in the North, targeted towards the business, technology, research and development sectors, building upon work done previously.

The Tech City scheme will be expanded nationwide, and is set to receive £21m in funding over the next four years. Tech City was started in London in 2011 to accelerate the growth of the UK digital tech sector, through a series of programmes, research and events.

Since its launch, the scheme has helped the digital tech start-up and scale-up sectors become the UK’s fastest growing industry. The UK tech sector had a turnover of £170 billion in 2015, an increase of 22% in five years. More than 1.7 million people now work in the digital tech sector and jobs are being created at twice the rate of other sectors in the economy, 85,000 of which were created from the past year alone!

The digital tech sector is one of the UK’s economic success stories, growing twice as fast as the wider economy and creating highly skilled workers and well-paid jobs. Image credit: www.techcityuk.com
The digital tech sector is one of the UK’s economic success stories, growing twice as fast as the wider economy and creating highly skilled workers and well-paid jobs. Image credit: www.techcityuk.com

In line with its new focus, this scheme is renamed to Tech Nation, and aims to bring jobs, skills and higher productivity to the regions. Leeds and Sheffield will become home to a Tech Hub, which will support businesses and enable skills in the area to thrive and prosper.

Hammond said, “A new tech business is founded in Britain every hour. And I want that to be every half hour.”

The Chancellor also extended the National Productivity Investment Fund for a further year, expanding it to more than £31bn. The fund was a £23bn fiscal stimulus introduced by Hammond in 2016, to tackle the UK’s poor productivity and lower growth forecasts resulting from Brexit.

A further £2.3bn is being allocated for investment in research and development, while £500m of investment will go into a range of technological initiatives ranging from artificial intelligence (AI) to 5G and full fibre broadband.

Lee Dentith, CEO and founder of the Now HealthCare Group, added: “This is a good start and will work towards ensuring the UK stays at the forefront of technological innovation. AI is vital in transforming the health of our nation and R&D investment from PhD student level onwards will help us and other digital health businesses develop pioneering solutions to tackle health problems.”

In furthering devolution for the regions, the Chancellor also announced a new deal for the North of Tyne region, a new combined authority comprising the Newcastle, Northumberland and North Tyneside councils. Devolution is about giving more governmental powers to the local authorities for regional self-government. A mayor will be elected for the combined authority of North of Tyne and he or she will be able to exercise these devolved powers. The North of Tyne will elect their mayor in May 2019.

The focus of this devolution deal is to create “more and better” jobs in the Northeast. Initial analysis finding 10,000 jobs could be created, 25% of which would be south of the Tyne. £337m will go towards the Tyne & Wear Metro, which is vital funding for it to replace its ageing trains.

In the aftermath of Brexit, the UK is mobilizing its economy in a massive push towards economic development, with emphasis on building the regions. For investors this will mean a strong outlook for the property market in the UK outside of London, and new regional property developments are particularly attractive investments.

By Ian Choong

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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 Bank Raises Interest Rates

Categories:Reading and Research

Experts and industry players are clear that the increase in interest rates will not have too adverse an effect on the property market. In fact, the UK’s property market will take the rise in its stride, according to ratings agency Moody’s.

The official bank rate in the UK has been lifted from 0.25% to 0.5%, the first increase since July 2007. The move reverses the cut in August of last year, which was made in the wake of the vote to leave the European Union.

Even with the increase, interest rates still remain at historic lows. To lend some perspective, Malaysia’s interest rates are at a high 3%, while the interest rates for Australia and Singapore are at 1.5% and 1.1%, respectively.

Higher interest rates increase the cost of borrowing money, which moderates economic growth and brings inflation under control.The panel which sets interest rates, called the Monetary Policy Committee (MPC), has justified the rate increase by pointing to record-low unemployment, rising inflation and stronger global economic growth.

 

In contract, Malaysia's interest rates are at a far higher 3% compared to UK's 0.5%. Image credit: Trading Economics
In contract, Malaysia’s interest rates are at a far higher 3% compared to UK’s 0.5%. Image credit: Trading Economics

Bank of England governor Mark Carney stated that the UK economy is expected to grow at about 1.7% for the next few years. He said this would require “about two more interest rate increases over the next three years”, taking the official rate to 1%.

The Bank of England (BOE) has been reluctant to raise interest rates until now, arguing that inflation had been boosted by the fall in the value of the pound since the Brexit vote in June of last year. OBR predicts inflation will peak at 3% this quarter before falling back towards its 2% target over the next year.

Expectedly, the increase in interest rates will cause knock-on effects in the UK property market. Homeowners on variable rate mortgages, whether it is a standard variable rate or a tracker rate, will be most affected. However, homeowners whose mortgages are on a fixed rate will not be affected by the rate hike until  they remortgage their property.

Higher mortgage payments caused by rising rates can put less households in reach of a mortgage (loan). The lower competition can reduce demand for property which will in turn slow down property price growth. Correspondingly, the market for rental properties will increase as people who might have bought a house can now only afford to rent. This, from the investor perspective, is a good thing.

Experts and industry players are clear that the increase in interest rates will not have too adverse an effect on the property market. In fact, the UK’s property market will take the rise in its stride, according to ratings agency Moody’s.

Moody’s economist Colin Ellis said, “We have expected a rate rise for some time. This is about taking away emergency stimulus introduced after the referendum vote. A rise of 25 basis points [0.25%] is not going to move the dial. A rise of 0.25% pales into insignificance compared to the 8%-10% decline in the currency.”

Surveys from major mortgage lenders Halifax and Nationwide have painted a buoyant picture of the housing market. Halifax reported that house prices in the UK were rising at their fastest annual pace since February, up 4.5% to a record £225,826. Nationwide’s house price index also showed prices picking up in October, to an annual rate of 2.5%, the highest reading recorded in three months.

Savills predicts the housing market will grow by 14% from 2018 to 2022 based on an assumed Bank base rate of 2.25% by 2022. The north-west of England is set to experience the fastest price growth in the UK over the next five years: a surge of 18.1%.

Savills also forecast that rents are set to grow faster than house prices in London for the first time since 2011. They are forecast to rise 17% over the next five years, despite a 3% fall this year.

Virata Thaivasigamony of property consultancy CSI Prope commented, “The interest rates are now still very low, so it’s a good time to get into property. The fact that the UK is increasing interest rates at this time is a great statement of confidence in its economy, that Brexit is no longer a cause for concern.

“The UK has had a housing crisis over the past few years, and the increase in interest rates isn’t going to change the basic fact that people still need homes — which are a basic necessity. If people can’t afford to mortgage, they will have to rent. You’ll see rental income potentially going up, as demand for housing continues its upward trend.”

Interest rates remaining near historic lows bodes well for buyers, and today’s market still reflects some of the cheapest debt a property buyer will be able to attain in the market.

Article by Ian Choong

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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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Property Investors Benefit from UK Stamp Duty Cut

Categories:Reading and Research

The abolishment of the stamp duty for property up to £300,000 in the recently announced UK Budget will largely benefit first-time house buyers as well as investors/ current owners.

The UK Budget, announced just a few days ago, was billed the ‘Housing Budget’, with housing placed at the heart of the British government’s spending plans.

Chancellor Philip Hammond announced that more money will be poured into housing over the next five years to ensure that land is available, that homes, including affordable homes, and supporting infrastructure will be built where needed.

But the real headline-grabber was the abolishment of the Stamp Duty and Land Tax for first-time buyers, which is effective immediately.

Stamp duty and land tax is a lump sum payment imposed on purchases of property or land over £125,000. The tax rate varies depending on the value of the property.

The new Budget stipulates that stamp duty will not be imposed on purchases of property priced up to £300,000 outside London.  Meanwhile, in high priced areas like London, exemptions will be availablle on the first £300,000 of the purchase price of properties up to £500,000.

The Chancellor said that this is effectively a stamp duty cut for 95% of first time buyers and that going forward 80% of first time buyers will not pay the tax.

The changes in stamp duty announced in the UK Budget on 22 November, is effective immediately and will not just benefit first-time buyers, but also current owners/investors. . Image credit: http://bit.ly/2BkH1Is
The changes in stamp duty announced in the UK Budget on 22 November, is effective immediately and will not just benefit first-time buyers, but also current property owners/investors. Image credit: http://bit.ly/2BkH1Is

The Chancellor introduced the policy after it was revealed that the number of people under 45 who own their own home has fallen by 20% since the Tories took power seven years ago.

While the new policy will largely benefit first-time house buyers, investors will benefit, too, as demand will push up property prices, which, together with the inherent lack of supply, will continue to drive people to rent. This will keep the rental market strong.

“The abolishment of stamp duty for property under £300,000 will fuel a spike in the prices of homes within this range due to increased demand and a rush to buy currently available property within this price range,” says CSI Prop spokesperson Virata Thaivasigamony.

“It’s a double-edged sword and boils down to housing availability. The reality is that there is a housing undersupply in the UK with little likelihood that supply will increase in such a short period,” he adds, alluding to the Chancellor’s pledge to increase construction of new homes to 300,000 a year on average by the mid-2020s (up from 217,000 last year).

The secretary of state responsible for housing, Sajid Javid, has said that up to 300,000 additional homes must be built in England annually, up from about 150,000 in 2015 and a little more than 220,000 over the past year. Some industry players say this looks increasingly unlikely given the significant national deficit and ongoing debates over green belt construction.

The Office for Budget Responsibility said that the tax break could push property prices up by approximately 0.3%, with most of the increase coming in 2018. It also said that it is the current property owners who would be the main gainers of the new policy.

HMRC has also confirmed in a statement that while the new stamp duty policy reduces the upfront cost of buying a home for first time buyers, it is also expected to lead to an increase in house prices in the first year after implementation.

Meanwhile, with the increase in prices and undersupply in housing comes a continued demand for the private rented sector. The Property Wire quotes Andrew Turner, chief executive of brokerage Commercial Trust Limited, as saying that there could be a higher demand for private sector homes in Birmingham, Manchester and Liverpool where landlords are already enjoying higher yields than in London.

The Royal Institute of Chartered Surveyors (RICS) has predicted that 1.8 million more households would be looking to rent by 2025 as a result of increasingly unaffordable homes.

Dorian Gonsalves, chief executive officer of franchise lettings agency Belvoir, pointed out that demand for rental properties is set to remain high. 

He pointed out that many young people are actively choosing to rent rather than to become first time buyers and that is not necessarily going to change.

‘The reasons for renting are numerous, and many young people simply do not want the commitment of a 25 year loan,’ said Gonsalves.

What was rather unexpected in the Autumn Budget was the announcement that capital gains tax (CGT) will be imposed on all real estate types, to be effective likely by April 2019. Currently, CGT is only imposed on residential property.

This, however, is unlikely to affect investor appetite much, as many other jurisdictions already impose CGT on foreign property investors. Additionally, the robustness, transparency and resilience of the UK property market — on top of the weakened pound — continue to remain top criteria for foreign investors.

The Autumn Budget has also given local councils the authority to double taxes on empty properties. Under the new rules, local councils can charge up to an extra 100% of council tax if a home has been empty for two years or more, up from the current 50%.

Looking for projects below the £300,000 and  £500,000 (London) range? Contact us at 03-2162 2260.

Article by Vivienne Pal

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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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Manchester, The Original Modern City

Categories:Reading and Research

For over 250 years, one UK city has built its reputation for creating more than its fair share of world firsts. Guess which city that is?

Manchester, the new Modern city
Manchester is the UK’s original modern city (Image source: Youtube)

For much of the time it existed, Manchester was a manorial township, with peasants working the fields for the Lord of the Manor. It was only during the turn of the 19th century that Manchester underwent a transformation, and grew at an astonishing rate. This expansion and urbanisation was brought on by a boom in textile manufacturing during the Industrial Revolution, and resulted in Manchester becoming the world’s first industrialised city.

Today, Manchester is known as the UK’s second city. With 50% growth in the last 10 years, it is the UK’s fastest-growing city and Europe’s second largest creative tech hub. Around 70,000 people now work in the city’s creative, digital and tech industries and a rich talent pool of over 110,000 thinkers thrive in the four leading universities there.

Many defining achievements in science and technology come from Manchester. It’s where the world’s first IVF baby was conceived, where they split the atom and isolated graphene. It’s also where the world’s first stored programme computer was built. A total of 25 Nobel prize winners have come out of Manchester!

Massive amounts of investments have gone into Manchester as part of the British government’s Northern Powerhouse push. Starting from this year, £1 billion will be spent to transform the Manchester airport, further establishing Manchester as one of the most connected cities in the world. The city already boasts direct connections to many of the world’s major capitals, like New York, Hong Kong, Singapore and Beijing. The new High Speed Rail (HS2) under construction will cut travel time between Manchester and London from the current 2 hours to just over an hour when it is ready, and, in its second phase, also reduce the time required to travel to Birmingham and Leeds.

Manchester’s staggering development makes it an attractive place for investors looking for the next big thing to invest in. Property, in particular, is a solid choice as there is a growing demand for housing in the city. Manchester registered a 7.3% increase in house prices over the past year, topping the list of all cities in the UK. This demand is bound to rise even higher as Manchester’s economy grows, and more and more jobs are needed.

This video captures the essence of Manchester as the original modern city of the UK:

Facts and figures about Manchester:

  • Birthplace of the Industrial Revolution
  • Where the world’s first IVF baby was conceived
  • 25 Nobel prize winners
  • Where they split the atom and isolated graphene
  • Where the world’s first stored program computer was built.
  • Population of 2.7 million people
  • Over 200 languages
  • With 50% growth in the last 10 years, Manchester is the UK’s fastest-growing city and Europe’s second largest creative tech hub
  • Around 70,000 people now work in the city’s creative, digital and tech industries
  • A rich talent pool of over 110,000 thinkers from four leading universities.
  • Between 2015 and 2017, over £1 billion was spent on the city’s infrastructure.
  • Direct flights to many of the world’s cities, e.g. New York, Hong Kong, Singapore, Beijing etc.
  • Called the UK’s second city
  • Global exporters of world-class culture as well as technology; a city united by a passion for sport and music
  • One of the world’s best places to visit in 2015 — the only British city to be given this accolade by the New York Times
  • Home to some of the world’s biggest brands which contribute to Manchester’s £50 billion economy.
Article by Ian Choong

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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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London Falling

Categories:Reading and Research
Not all about London anymore. The London housing market is struggling with prices falling for the first time in 8 years. At a record drop of 0.6% in September this year, London is the weakest performing region in the UK for the first time since 2005. Image credit: http://bit.ly/2gcAlkU

Increasingly, statistics reveal that growth is expanding outside London. The focus — be it for housing, jobs, resources, or investment — has moved to buzzing regional cities where business is booming on the back of lower costs and a higher quality of living.

The London housing market is struggling. Nationwide reports that London house prices have fallen for the first time in 8 years, and, at a record drop of 0.6% in September this year, London is the weakest performing region in the UK for the first time since 2005.

Outside London and across the UK, however — despite Brexit and concerns about the economy — prices are still rising, albeit at a slower pace than in recent years. And yet, while London’s house prices may have dropped, they remain unapproachable compared to the cities beyond.

To date, house prices charting the most significant increases in England and Wales are the Midlands* and Northwestern cities of Manchester and Liverpool, as well as in some pockets off central London like Luton and Guildford, and Northern Ireland.

A chart published recently in the Financial Times shows house prices falling in London and the South East but growing elsewhere. Image credit: Financial Times; source: RICS

Greener Investment Pastures Beyond London

Years of rapid price increases have made London and the south unaffordable to many buyers, prompting them to buy further away and commute. After all, it takes less than an hour to travel from Bedford or Luton  to central London by train, while cities like Birmingham, Manchester and Liverpool have a buzzing business scene.

The signs have been there for a while now, says Virata Thaivasigamony of CSI Prop, an active property investment consultancy in Kuala Lumpur, Malaysia that promotes investments in UK and Australian property.

“The writing has been on the wall for some time and we’ve said that prices in London will flatline this year. London has always been regarded as the business capital and startup central of the UK, but the fact is that businesses and investments are moving outside of London and into the regional cities. It would be remiss of us to ignore that the best places to invest in are now in those cities,” he elaborates.

What’s Trending

Manchester, popularly assumed as UK’s second city and the Silicon Valley of Britain, is fast earning a reputation as the hotbed of tech and startup talent in the UK, thus pushing property prices up. The city is also a recipient of billions in investment dollars, thanks, in part, to the government’s push for the Northern Powerhouse, propelling the rise in investment returns across central and Greater Manchester, including Salford as well as other Northern Powerhouse core cities like Liverpool.

Prices of property have been rising in Northwestern cities such as Manchester, as more corporations move from London to this city to set up headquarters and make use of its resources and talent pool. Image credit: http://bit.ly/2hEX3Um

Corporations are decentralising from London to the regional cities, too. BBC, ITV and HSBC come to mind, having set up home in Greater Manchester; airlines such as Hong Kong’s Cathay Pacific have since 2014 provided direct flights between Manchester and Hong Kong, while China’s Hainan Airlines launched a direct flight service in 2016, making Manchester Airport the only British hub outside London to have non-stop flights to Beijing.

Meanwhile, Berkeley, one of Britain’s best-known luxury housebuilders has broken out of London to build a business in Birmingham to cater to housing demand in the city.

Javad Marandi, a British businessman with investments in commercial and residential real estate says, “Regional markets including the North East, the South West and Yorkshire and Humber have shown growth in commercial property activity, a sure sign of a growing business environment with an increasingly positive outlook, making them one of the best regions to invest in. Building a workforce, free of soaring London living costs, will in turn be cheaper to employ – and no doubt happier with the favourable cost of living outside the capital.”

That Britain is plagued by a serious undersupply in housing is an understatement. Opportunities in these cities have expanded the population, further underscoring the acute demand and need for housing. From a property investment standpoint, this is a good thing.

Meanwhile, a number of university cities are showing a spike in house prices. Towns that are home to a large student population such as Guildford and Liverpool, are seeing a surge in prices. The biggest 3-year percentage house price rise was near the University of Bedfordshire, which has its main campus in Luton, charting a 42% increase in prices over the period of an undergraduate degree.

“The best regions to invest in lie outside the capital – it’s no longer all about London,” Marandi concludes.

Statistics by RICS indicate that house prices are set to rise across England next year except for London. Image credit: Financial Times; source: RICS

Growth Outside London  

The UK is still seen as a good and safe place to invest your money due to a weakened pound, and, in spite of uncertainties arising from Brexit.

House prices will continue to rise as demand increases and Britain grapples with a chronic housing undersupply, but it appears — for now — that the best investment opportunities lie in regional cities like Manchester and Liverpool, and the outer boroughs of London.

That said, it is crucial to note that London is a market within a market, with characteristics of its own, and that it will bounce back — just as the housing market in the Midlands* bounced back from a low in 2015 to become one of Britain’s fast-growing housing markets today. On a positive note, it is during these low-market times that savvy investors invest in order to reap the most luscious of fruits when the market bounces back.

Article by Vivienne Pal

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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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Liverpool’s Knowledge Quarter is World-Class Innovation District

Categories:Reading and Research
Liverpool’s Knowlegdge Quarter: here’s a partial location map to provide perspective to the project. Image credit: http://bit.ly/2y9YbGi

Liverpool is on the cusp of becoming a world-class destination for science, innovation, education, technology and the creative and performing arts. The city’s £2bn vision to establish Liverpool’s 450-acre Knowledge Quarter as one of the world’s leading innovation districts, will further reinforce its status as one of the best student cities in the world.

The Knowledge Quarter is one of five mayoral development zones in Liverpool. It spans a huge area mostly to the east of the city centre behind Lime Street Station, encompassing the University of Liverpool, Liverpool John Moores University, the Liverpool School of Tropical Medicine, the new Royal Liverpool University Hospital, Sensor City, and the Liverpool Institute for Performing Arts.

The Knowledge Quarter in Liverpool is around 450 acres and Paddington and KQ Gateway are each around 30 acres. Image credit: http://bit.ly/2ylVlPm

Within the Knowledge Quarter are two major development sites: the £1bn Paddington Village and Knowledge Quarter Gateway. Another key development is the Knowledge Quarter Liverpool (KQ Liverpool) railway station, connected to the city’s underground network.

Paddington Village

The Paddington Village project occupies a massive a 1.8m sq ft behind the Royal Liverpool Hospital, and is earmarked for health, education, science and residential development. Construction giant Morgan Sindall has already won the contract to design and build the £35m new Northern base for the Royal College of Physicians (RCP).

The RCP is one of the world’s most renowned medical institutions and the Liverpool project, its first centre of excellence outside London, will create 100 jobs. Completion is targeted at 2019.

Also committed to the site are Liverpool International College and The Rutherford Cancer Centre. The RCP and Liverpool International College are the anchor tenants of the site.

Work has already begun at the new Royal Liverpool Hospital, which is perhaps the biggest project in the Knowledge Quarter. Here is Aidan Kehoe, chief executive, Royal Liverpool and Broadgreen University Hospitals NHS Trust, on the site of the new Royal. Image credit: http://bit.ly/2xe8Bp1

KQ Gateway

KQ Gateway sits at the other end of the Knowledge Quarter, between Mount Pleasant, the old Lewis’s store, Copperas Hill and Lime Street Station. The area, with the support of the mayor of Liverpool and collaboration with other parties, will be transformed into a vibrant space – new shops, offices, galleries, bars, restaurants, gyms and university space.

Only 2 hours from London by train, KQ Gateway will offer a new commercial space for tech and digital businesses, alongside futuristic educational space. Regeneration of KQ Gateway is already underway — the Ion scheme on Lime Street and the Liverpool John Moores University’s demolition of the former sorting office on Copperas Hill, to name a few.

Work Underway

The new Sensor City in Liverpool’s Knowledge Quarter is cladded with stunning gold circuit boards, marking a £15m high-tech hub that could create 1,000 jobs and help make Liverpool a global technology leader. Image credit: http://bit.ly/2yawoWk

The biggest project so far in the Knowledge Quarter is the massive new Royal Liverpool Hospital.

But several other projects are already well under way, including the £15m Sensor City scheme and the Materials Innovation Factory where Unilever and the University of Liverpool are working together to create innovative products and materials.

Existing schemes in the Knowledge Quarter include Liverpool Science Park, whose three buildings are already 90% full.

Liverpool mayor Joe Anderson said: “With £1bn of investment already underway and a potential further £1bn at Paddington Village alone, these are really exciting times for Liverpool and the wider city region’s knowledge economy.

Mayor Anderson agrees: “KQ Gateway not only presents an opportunity for significant future investment and regeneration but will ultimately create more highly skilled jobs in Liverpool and strengthen the city’s position as a world-leading innovation district. By attracting investment and creating jobs, I believe that we can improve people’s lives.

“Ordinary cities lead to ordinary lives but Liverpool is no ordinary city – we are exceptional and exceptional cities foster exceptional lives”.

What’s clear at the end of the day is that the Knowledge Quarter scheme could bring THOUSANDS of new jobs to the city in addition to increasing demand for housing.

Knowledge Quarter chief executive Colin Sinclair said: “We’re not just banding big figures around. What we’re trying to say is this is a landmark, a historic moment in the future of Liverpool .

“And there’s a really bright future for Liverpool. When that kind of investment is being made you can really say to any investor from around the globe, America, India, China, that Liverpool is a city of opportunity.

“It’s a step change. We’re not dabbling around the edges here. We’re trying to create something that is lasting for the city.”

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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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Five New Investors for Liverpool City Region

Categories:Reading and Research

The city of Liverpool recently received a wave of new investors.

These investors, comprising Danish energy firm DONG Energy, transport giants Alstom Transport and Stagecoach, Liverpool-based museum British Music Experience and training provider South West Regional Assessment Centre, are investing in the area as partners of the Liverpool City Region Local Enterprise Partnership (LEP). Under this partnership, all five organisations will now be able to contribute to growing the city region’s economy through the LEP alongside like-minded businesses and organisations

LEPs are voluntary partnerships between local authorities and the private sector set up in 2011 by the Department for Business, Innovation & Skills to lead economic growth, job creation and maximise return of investment within the local area. The Liverpool City Region, centred in Liverpool, also covers the local authority districts of Halton, Knowsley, Sefton, St Helens and Wirral, and has a population of between 1.5 million and 2.3 million.

LEP chair Asif Hamid MBE expressed his appreciation for the support extended by the five organisations to the city region and the LEP as partners.

“This is an exciting time to be doing business in the city region and this new and continued investment by these businesses will make a huge contribution to the economic growth and employment opportunities here. All the support we receive from our partners goes directly into making a difference to the city region’s growth for the benefit of the wider community,” he said.

DONG Energy UK managing director Matthew Wright said: “We have operated out of Liverpool City Region for over a decade and worked very closely with the Liverpool City Region LEP on a number of initiatives, including our event to mobilise the North West supply chain, the International Festival for Business and most recently the inauguration of Burbo Bank Extension, one of our two offshore wind farms in Liverpool Bay.

“Together these wind farms generate enough low carbon energy for over 310k homes, so we’re really excited to join others in this partnership to continue to drive forward the growth of the low carbon sector in the city region.”

The Liverpool LEP was established in 2010. Liverpool is a core city in the Northern Powerhouse, an initiative by the government to boost economic growth in the North of England by investing in skills, innovation, transport and culture, and devolving significant powers and budgets to directly elected mayors to ensure that decisions in the North are made by the North.

With the Liverpool City Region LEP Strategy, Liverpool is well and truly open for business. This strategy will see the possible creation of more than 100,000 new jobs, an increase of more than 50,000 people and growth of  more than 20,000 businesses. It will also see a boost in Liverpool’s economy of some 50 billion pounds!

Liverpool has been ranked among HSBC’s Top 10 Buy-to-Let Hotspots in 2015 by yield. The city has also been pivotal in driving an increase in the number of renters in urban areas from 80% ti 86% over the last 10 years, according to Knight Frank.

This article was originally sourced from http://bit.ly/2fhP7rO

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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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The Waitrose Effect on UK House Prices

Categories:Reading and Research
A Waitrose outlet. Image credit: http://themarketinglessons.com/swot-analysis-for-waitrose/

Imagine adding almost £40,000 (!!!) to your house price value just by living in close proximity with Waitrose, Marks & Spencer or Sainsbury’s.

Not convinced? Take it up with Lloyds Bank, whom we credit for the term ‘Waitrose Effect’.

The bank released a research which revealed that properties within easy reach of local supermarkets have an added premium of  £21,512 on average compared to those in nearby areas.

Waitrose Effect: How much is living near a supermarket worth? Source: Lloyds Bank

Living near Waitrose commands the highest premium, at more than £36,000 to the value of your property.

Marks & Spencers comes in second at £29,992 additional premium, followed by Sainsbury’s (£26.081), Tesco (£22,072) and Iceland (£20,034).

In its initial release in 2016, the research showed that property in the same postal district as Waitrose command the highest premium compared to other areas in the same town in 7 out of 10 regions of England and Wales. The largest premium is in the North West: average house prices in an area with a Waitrose is £73,629 (39%) higher than in surrounding areas.

Living near Waitrose commands the highest premium, at more than £36,000 to the value of your property.

However, if your property is located within easy reach of all four supermarkets, then you’ve got a big win at an average premium of 9%. In 2016, Chiswick in West London commanded the highest average house price premium compared with surrounding areas, at £476,738. According to Lloyds Bank, the average house price in Chiswick (which has a Waitrose, Sainsbury’s and Marks & Spencer) is £961,564 — almost double the price for Hounslow.

Property located close to budget supermarkets get a premium hike, too. House prices of homes close to an Aldi, Lidl, Morrisons or Asda have grown by an average of 11% since 2014.

Homes located near a Lidl valued at £6,416 more on average than those in the surrounding area. Conversely, however, properties near an Aldi are £2,902 less expensive on average than those in surrounding areas.

Read the full report here: http://bit.ly/2s6xlQm

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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 General Election and the Housing Market [VIDEO]

Categories:Reading and Research

The UK general election was called on 18 April. Unusually, news of the UK general election was not leaked, preventing a lengthy build-up in the housing markets. Virata Thaivasigamony, spokesperson of CSI Prop shares his views on the subject.

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Click on CC for subtitles. Or else, feel free to read the full transcript below:

The Prime Minister’s call for a UK general election in (less than 6 weeks) was a surprising one. There are pros and cons, of course. The UK general election is an opportunity for the new government to create policies and a clean slate to do something for the voters. We all know that the no. 1 thing on voters’ minds are housing affordability and shortage of housing.

On the day of the Prime Minister’s announcement, the pound dropped then rose to its highest level in weeks. In fact, it’s been on an upward trajectory since. IMF revised its prediction of the growth of the UK economy from 1.5% to 2%. Even Deutsche Bank, who has been very critical of the sterling, reversed its stance, citing the election as a game changer.

We at CSI Prop predicted that the pound would drop immediately after Brexit then rise — which is exactly what happened. It is our sense that the pound will continue to rise over the coming months.

The UK housing market has been a resilient one over the years. However, there will be uncertainty leading to the elections. Major decision-making may be put on hold until the election results are out.

But the uncertainty will be relatively short as there has been no news of the UK general election that was leaked. This prevented a lengthy buy-up that would have otherwise affected the housing market.

Ultimately, there is a critical shortage of housing in the UK. Demand continues to outpace supply so it’s only logical that for many years to come, prices will continue to remain high.  However, the UK general election is an opportunity for the new government to start on a clean slate and make changes that will affect the housing market. Of course, we hope that the government will revisit policies affecting landlords, foreign investors, and the buy-to-let market. After all, these people are key to ensuring housing supply in the UK.

Theresa May’s domestic agenda is to “build a country that works for all”. It is our sense that if she wins, she will have more flexibility to make compromises to ask for a more moderate deal for Brexit without being beholden to groups interested in a hard Brexit, or even support from her very own party. This should have a positive impact on the UK economy and the pound sterling which is great news for investors taking advantage of the favourable exchange rates.

It’s premature at this point for anyone to guess who will win the UK general election. We will of course continue to monitor developments in the market and keep you posted. Suffice it to say, regardless of who wins, the housing crisis and shortage of housing (in the UK) isn’t going anywhere.

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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 and the Snap Election

Categories:Reading and Research

Prime Minister Theresa May’s surprising announcement for a snap election brings the British people to the polls again for the 3rd time in as many years. Image credit: www.themirror.co.ukThe dust has barely settled since Brexit, yet the UK is now bracing for another political turn of events, thanks to PM Theresa May’s call for a snap election this June. This will be the third time Britain will go to the polls in as many years. The surprising announcement saw shock waves reverberate across the FTSE and capital markets as an immediate reaction. Meanwhile, the IMF has revised up its forecast for UK growth this year – from 1.5% to a punchy 2%.

“Naturally, there there are pros and cons. But in a nutshell, the election will pave the way to a clean slate, for the new government to gracefully negotiate Brexit to protect the interests of Britain and its investors/stakeholders. However, the issue of housing shortage remains critical. There will be uncertainty in the market from now leading up to the election, but the impact will not be a long-drawn one, given the short time frame and the surprise element of the PM’s announcement. This is the opportunity the new government should seize to address housing supply for the sake of first-time house buyers, and policies for the sake of landlords, foreign property investors and the buy-to-let market who are crucial in housing supply,” said Virata Thaivasigamony of CSI Prop, alluding to changes in stamp duty policies announced by the UK government.

The pound strengthened significantly when the snap election was announced and has been on an upward trajectory since. Image credit: xe.com
  1. Stronger Sterling

The sterling rallied to its highest level in more than 6 months on the day of the PM’s surprise announcement, jumping 2.37% to $1.2904 against the USD — its highest surge since early October 2016. Deutsche Bank, one of the world’s biggest sterling bears, finally reversed its stance on the sterling, describing the early election as a game-changer for the currency. We accurately predicted that the value of the sterling will drop and rise again with Brexit & Article 50, which was what happened. Our sense is that the sterling will continue to strengthen over the next few months.

  1. Housing Market

The housing market in the UK has been generally resilient. However, there will be uncertainty in the housing market leading up to the election; major decision-making may be put on hold until the election results are out. Uniquely, the announcement was not leaked, which means the uncertainty will be relatively short as the element of surprise has prevented any build-up to affect the housing market. Ultimately, there is a chronic and unsustainable shortage of housing in the UK, which will continue to underpin housing market. Demand will outpace supply and keep prices up for years to come. However, the election is an opportunity for the new government to begin on a clean slate and affect change that benefits the market. It is an opportunity also for the new government to revise legislations and policies on behalf of local landlords, foreign property investors and the buy-to-let market as they play a party in the supply of housing. A clear election result could boost the housing market.

Deutsche Bank has taken a positive stance on the UK snap election and its impact on Brexit negotiations. Image Credit: Ed Conway
  1. Brexit Negotiations

Our sense is that if Theresa May consolidates her position, it will strengthen her mandate to bring more stability particularly vis-a-vis Brexit. Her domestic agenda is to build a country that works for all. A big win means she will be less answerable or beholden to groups interested in a ‘hard exit’; it gives her flexibility to make compromises and cut a more moderate deal for Brexit without worrying about support from the party or Eurosceptics. This will obviously have a positive effect on the UK economy and the pound will keep strengthening. Economists also argue that the election raises the chances of a ‘transitional deal’ after 2019 (when Brexit should have happened), as the next government won’t need to hold another election until 2022 . This is good for investors who are taking advantage of the favourable exchange rate.

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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential 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. 

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