Have you been considering investing in the property market, but don’t know exactly where to turn your attention? It can be a difficult decision. Markets around the world fluctuate and stutter in the face of economic and political instability, and considerable price falls are expected; especially in the China, Hong Kong and Singapore property markets.
While Asia’s domestic markets continue to decline, UK real estate boasts performance levels investors are desperately seeking. February 2016 saw UK property values hit a new 10 month high, rising 4.8% since April last year. We asked the leading British property developer Select Property Group, what’s behind the British real estate boom?
Once renowned as being a nation of homeowners, fewer Britons are buying property today and are renting instead. While some harbour ambitions to own in the near future, there is an increasing number of tenants that prefer the flexibility renting provides. “Primarily this new trend is being driven by young people; tenants that belong to a generation that no longer equates home ownership with success,” says Adam Price, Managing Director at Select Property Group.
According to the latest estimation, over 50% of 20 to 39 year olds in the UK will be renting their homes by 2025, which will set a demand for high quality, city centre properties in vibrant young communities. “This is where build-to-rent comes in,” says Adam. “Build-to-rent, real estate that is purposely built for the rental sector, is the fastest growing property sector in the UK right now.”
London at the end of its growth cycle
While London has been great for its existing investors, it’s now increasingly unaffordable for first-time buyers. Over the last two decades prices have soared, and the average asking price in the capital is around 182% higher than the average collective value of property in England and Wales. “The rapid acceleration of property values in London appears to be slowing down as a result of declining buyer demand. In addition, the yield growth in the prime central London sector fell by 0.7% in December 2015,” says Adam.
Eyes on Manchester
When it comes to a lucrative build-to-rent opportunity, there is one standout city that possesses the greatest potential, and delivers the level of returns Asian investors are searching for. “Manchester is undoubtedly the city where we have seen the investor sentiment rise the fastest,” says Adam. Huge investments in transport, education and commerce are planned across the north of England over the next few years, and Manchester is well placed to capitalise on the economic growth that’s expected. In addition, it has the country’s lowest levels of housing supply, it’s been named the best UK city for property investment yields by HSBC, and the best British city to live in according to Global Liveability City.
Manchester is also a young city. Over 60% more of the 25 to 29 year olds live in Manchester than the UK average, and they are looking for a place to live. “Only one third of the needed built-to-rent units are being built yearly, meaning that the time for investment has never been more pressing,” says Adam. “With an estimated 89% increase in the number of young people living in Manchester over the next 10 years, the time to invest is now.”
The UK property market remains the first choice for growth and investment stability for many international investors, and Manchester is now the city with the greatest prospects. If you would like further information about investing in the UK, or to find out about Select Property Group’s latest investment opportunities, contact their Singapore office below.
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