Best Places to Invest: Top Locations for Capital Growth
Top Locations for Capital Growth: Northern England Dominates Market
Traditionally the property investment market has performed strongly in London. However, trends are changing as the North of England dominates the market. Many cities across the north are gaining interest from investors, both national and international. Furthermore, the stamp duty holiday continues to take the market by storm as buyers rush to finalise transactions.
Moreover, impacts of the pandemic, travel restrictions and the rise of homeworking has led to the largest exodus from London in four years. Figures reveal Londoners purchased 73,950 properties outside of London during 2020. Particularly because, homes outside the capital are much cheaper to buy and offer larger rental yields. As a result, the supply of properties is becoming readily available in London. Whereas demands remain relatively low.
Cities with the Strongest Capital Gains
Today we are rounding up the top cities to invest in. The locations are ideal for those wanting to secure a long-term property investment. Areas with the highest capital growth tend to include cities undergoing huge regeneration schemes. Revitalising the city or neighbouring areas, ultimately impacts the economic growth. Transforming neglected areas into financial, creative, and business hubs attracts a wealth of skilled and young working professionals to the city. Therefore, driving rental demand and in effect, increasing property prices.
Over the last 5 years the following cities across the UK achieved the highest capital gains:
Manchester: Strongest Capital Growth
Many investors like to secure long-term investments. Property prices in Manchester have increased over 50% over the decade, according to figures released by Zoopla. Therefore, generating an impressive ROI for current investors.
Manchester also performed strongly over the past 5 years. This comes to no surprise as Manchester has seen an incredible amount of redevelopment over the years, with many more projects in the pipeline.
Of course, it is a city with one of the youngest populations in the UK, with the average age of a person standing at 36.4. This is a fantastic opportunity for investors. Demand for properties will continue to rise with the influx of more young professionals entering the city to study and work. Therefore, resulting in a higher number of properties with a low vacancy rate. Forecasts predicts the city centre population will grow to 125,000 by 2025. This will add to the incredibly elevated levels of property demand.
Why Manchester Continues to Grow with Speed
The HS2 project has received billions of pounds worth of investments. This will benefit Manchester massively, shortening the commuting times to London. Reducing train journey times to just one hour could predominantly lead to a rise of Londoners moving to Manchester. The average house price in Manchester is £503,385 cheaper than a property in London. Therefore, Londoners will more than likely purchase property in Manchester and commute to their places of work.
Manchester’s Key Regeneration Schemes
- Manchester City Council and Far East Consortium submit plans for Collyhurst Village regeneration as part of £4bn Northern Gateway Project.
- NOMA focuses on revitalising the northern area of Manchester city centre. In particular, the most neglected areas. It is the biggest development project in the North West and now features a business space, leisure area and open public spaces.
- Spinningfields – £1.5bn project which transformed the city into a financial hub. The area is described as the ‘Canary Wharf of the North’. Featuring big companies such as HSBC, Barclays, and PWC.
- Ardwick – The £100m regeneration scheme focused on the Brunswick estate. Revitalising the area to include community facilities and shops as well as adding another 500 additional homes to the area.
- MediaCityUK has transformed the face of Salford Quays. Formerly an industrial hub to the Manchester Ship Canal, it is now a creative hub. Featuring some of the UKs largest media companies.
- St Johns – The £1bn development is described as ‘Manchester’s newest city centre neighbourhood’. The area was originally occupied by the Granada television studios. It now features an arts venue which will become the home of Manchester International Festival. Alongside this St John’s will include 320 hotel rooms, over 560,000 sq ft of workspace. In addition, there will be 24,000 sq ft of retail space and an open public space.
Nottingham ranks #2 as the city with high capital growth. House prices have increased by nearly 20% over the last five years according to Zoopla. The wider Nottingham region has one of the largest labour pools in the UK, with over 889,000 people of working age. It is also home to an increasingly young population compared to other areas of the UK. Nottingham’s economy is expected to grow by 14.8% by 2027, therefore remaining as the fastest growing economy in the East Midlands.
Birmingham, the UK’s second largest city, lying in the heart of the Midlands, has witnessed some dramatic and exciting changes to its city centre with further regeneration planned in the coming years. The West Midlands was chosen for the UK’s first large-scale 5G ‘test bed’ – paving the way for the roll-out of the high-speed mobile network across the country. This new high-speed rail will cut journey times to London to only 49 minutes and has prompted a huge amount of investor interest. Living in Birmingham and commuting to work in London will become a feasible option and one many will utilise. Over the last five years prices in Birmingham have increased by 16% and with the new regeneration schemes, the upward trend will continue.
Known to adapt and diversify, the city has also future-proofed the economy. This thriving commercial city presents an excellent opportunity for property investment with two large scale transport projects on the horizon. Sheffield will be connected to the new HS2 high speed rail network, reaching London within 87 minutes. There are also plans for a Trans-Pennine tunnel to connect Sheffield to the booming city of Manchester. In turn, broadening the opportunities available for the younger and working population. Prices in Sheffield have increased by 15% over the past 5 years and will continue to increase with speed in the coming years. Furthermore, with the average house price standing at £225,322, Sheffield promises high rental yields.
This vibrant city has established itself as the UK’s second largest regional economy and leading centre for financial and legal services outside of London. Prices have increased by 10% over the last 5 years, but we predict these figures will inflate very shortly. Leeds City Council recently unveiled ambitious plans to double the size of the city centre in their exciting new South Bank regeneration project. It is forecast that house prices in Leeds will grow by 17.1 per cent by 2023, whilst rental growth in Leeds is also expected to rise 17.1 per cent over the next five years. During The Budget, Rishi Sunak also announced the development of the first UK Infrastructure Bank in the UK, based in Leeds. This will attract an array of job opportunities, businesses and boost economic growth.
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