Manchester is the UK’s fastest growing city, with population growth of 17.8% between 2003 and 2013 – double the national average over the same period. Over the next decade the population is expected to increase by an additional 128,000.
For investors looking to grow and protect their wealth, it pays to understand how economic volatility affects different investment asset classes, particularly in the current climate.
Certain asset classes have proven to have performed over the last decade, it is seen that UK property for instance has consistently fluctuated less than world commodity and equity markets.
Property in the UK also dipped less and rebounded more quickly than other asset classes following the 2008/2009 downturn, and subsequently recorded steady growth to reach historic highs in 2012. Meanwhile, commodity prices have sunk to levels lower than they were ten years ago, and the FTSE 100 has only recently returned to its pre-financial crisis levels.
Experienced investors have become increasingly wise to this state of affairs, and the stability and resilience of property continues to drive the sector forward as a key global asset class of choice.
“The United Kingdom (UK) remains a popular choice for South Africans from an offshore property investment perspective,” according to international property investment firm IP Global’s Director of Africa George Radford. “With forecasts putting price growth at 20% over the next three years, it’s currently all eyes on Manchester where the market is booming – driven by rising demand.”
The United Kingdom’s “second city” – and fastest-growing urban area outside of London – continues to flourish, with forecasts putting future price growth at 26.4% between 2016 and 2020.
The exceptional value available in the city is one of the main draws. Despite prices rising by 6% during the 12 months to December 2015, the average apartment in Manchester is still just over a third of the price of one in London – with an average price of GBP169,259 compared to GBP475,990. The city also has the UK’s highest rental yields which annually averaged at 6.02% between 2010 and 2015.
“It is becoming ever more challenging to find similar value in the traditional trophy investment markets of prime central London, Sydney, and New York,” says George. “Less obvious destinations, however, such as outer London and growing regional cities like Manchester, remain undervalued with significant potential for uplift.”
As an alternative, Manchester is the UK’s fastest growing city, with population growth of 17.8% between 2003 and 2013 – double the national average over the same period. Over the next decade the population is expected to increase by an additional 128,000. Its growing attraction is clear thanks to its economic performance and the value investors can find in the city.
“Manchester continues to grow, with property prices in the city remaining 13.6% below peak,” Radford adds. “Combine that with a growing population, increased job creation, and strong rental performance, and it makes it a very compelling investment case.”
“Many professionals in the United Kingdom are looking to the North for its steady supply of jobs, and a cost of living much lower than London,” he explains further. “In fact, Manchester has the largest professional and financial services sector outside of London.”
“Global real estate assets – as part of a balanced and diversified investment portfolio – are a good choice, not to mention a stable asset class in times of economic turmoil,” Radford shares. “The value of property investment over more traditional investment asset classes can be the key to securing strong and stable returns.”
The city is at the heart of the UK Government’s “Northern Powerhouse” strategy to connect Northern England’s biggest cities – Manchester, Liverpool, Leeds, Newcastle and Sheffield. The strategy will see £7 billion invested in science, transport and infrastructure over the next five years. With Manchester a major driving force and beneficiary of this investment, the scheme will aim to nurture greater economic connectivity across the North, providing a real counterbalance to the might of London and the South East. This strategy will create 110,000 new jobs by 2024 across a range of industries.
“Five-to-ten year holding periods in proven, safe-haven markets is a tactic which encourages growth at a sustainable pace and one that has enabled our clients to grow their portfolios during and in the years following a major global recession.”