The North West attracts more property investors from afar

Ryan Bembridge

October 18, 2018

Some 62% of investors in North West rental property are living outside the region, research from Commercial Trust Limited found.

Demonstrating how things have changed, in 2015 40% of investors in buy-to-let investors lived outside the area.

Andrew Turner, chief executive at Commercial Trust, said: “What is interesting about the North West purchases in 2018 is that the new data shows greater diversity in terms of investor location.

“In 2015, North West buy to let purchases were dominated by people from four areas.

“60% of all purchases were from people within the North West, with 23% living in London and the rest made up of people from the East of England and West Midlands.”

Today the proportion of London investors has risen to 24%. Meanwhile 11% of investors are in the East of England and 11% are in the South East.

The North West has grown to be an investment hotspot owing to measures like the 3% stamp duty surcharge, putting off investors from purchasing more expensive properties.

The likes of Liverpool and Manchester have also benefitted from significant investment in infrastructure, attracting businesses and people to the area and fuelling house price growth.

Owing to rising demand and comparatively low house prices, investors in the area have secured better rental returns than elsewhere in the UK.

In Liverpool there is £14bn city council programme of redevelopment and regeneration. This will see the development of 10,000 new homes, a new stadium for Everton Football Club, an additional cruise terminal, £250m of road infrastructure and two million square feet of commercial office space. Liverpool Local Plan has ambitions to create 38,000 new jobs and 35,000 new homes up to 2033, with the population forecast to rise above half a million.

Manchester has become a focal point for new tech firms and MediaCityUK, in Salford. Established names like Google, Amazon, Freshfields, LLP and Microsoft have all opened offices in Manchester.

Ben Roberts, director of capital markets at property consultant Lambert Smith Hampton, in the North West, said: “The North West has performed very strongly, particularly when compared with the national data, and we’re continuing to see a broad range of investors keen to invest into the region.”

This year a report from a Chinese property investment website Juwai.com, indicated that Chinese investors were also keen to invest in buy to let, in Liverpool and Manchester.

One of the by-products of Brexit negotiations has been a weaker pound sterling and Chinese investors have consequently had more spending power in the UK.

Whilst much of this traditionally focused on southern cities like London and Cambridge, enquiries in Manchester increased by 255.6% year on year, in January 2018. Liverpool saw a 160% increase in the same period, while enquiries in London were down 48.5%.

Juwai claimed that the average Chinese investor has £223,000 to spend – and the maths stacks up in the North West, where Rightmove indicates the average property price in Manchester is £190,000.

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