It’s already been a big year for investors. As Q2 2015 draws to a close, we take a broad look at the state of the property market in two of the UK’s best destinations for property: London and Manchester.
A Conservative victory at this year’s General Election has, without doubt, re-stabilised the UK property market and ensured that our capital remains one of the world’s top property investment hotspots. The uncertainty that preceded the polls has evaporated and investors are keen to capitalise on the potential of up-and-coming locations that are undergoing a great deal of development and infrastructural changes; the Crossrail project, in particular, is increasing investor interest in boroughs such as Ilford and Woolwich, previously ‘uncovered’ territories that are offering newfound value in the wake of an increase in demand.
Growth for Greater London was reported at 12% in the year to January 2015. When looking at initial projects for 2015-2019, research from Knight Frank forecasted uplift at 22.1% for central boroughs and 25.8% for outer regions.
Developers in central and greater London are set to contribute 23,428 and 32,154 homes to the capital respectively, but despite their efforts, it’s expected that there will be a shortfall of over 21,000 properties in the city every year. This undersupply, coupled with rapid population growth, is set to lead to favourable conditions for private property investors.
Much has been said of Manchester’s thriving property market, which is largely down to the area’s revived economy. The region is set to receive substantial investment from the government as part of its Northern Powerhouse plan, and as we documented in a recent blog post, improved connectivity and a renewed interest in commercial developments are set to re-balance the institutional divide between the North and the South and establish Manchester as a new force to be reckoned with in British industry.
Manchester is also struggling to supply enough homes for its ever-expanding population, another key factor in the increase in demand. There are now more than half a million residents of the City of Manchester and the population of the city centre itself has quadrupled in the last two decades.
According to the UK Land Registry, property prices had risen by over 5% in the year to March 2015, with the prices of inner-city apartments had grown by over 6% in the same period. According to research from KLL UYK, it’s expected that price growth in Manchester will reach 26.4% in the next four years to 2019.
Best of all for private investors, homes in Manchester are currently valued at less than half of those in London, ensuring opportunities for higher yields.