The decades old trend of London and the South East surpassing investment in the rest of the UK is being reversed. Regional cities are proving more attractive to investors, due to their thriving economies and Brexit-proof potential.
Here’s what to look out for to identify a regional hotspot:
Population rises create higher demand and drive innovation, as residential developers think up new ways to attract renters. Between now and 2041, the population of Birmingham is set to increase by 14.5%, Manchester 14.1%, and Liverpool 12%.
In the North of England, house price growth is expected to outpace London and the South East for the first time. Over the next five years, property prices are expected to rise by 21.6% in the North West, 20.5% across Yorkshire and the Humber, and 17.6% in the North East.
Cities with young populations and high graduate retention rates are well-known for innovation and entrepreneurship, as well as an extensive pipeline of future workers. Birmingham is the youngest city in Europe with 40% of the population under 25, while 42% of Liverpool’s residents are under 30, and Manchester has a 70% graduate retention rate.
While London and the South East offer some of the poorest rental yields, of 4.4% and 3.7% respectively, regional cities have some of the most lucrative. Sheffield has rental yields of up to 9%, Manchester 10%, Newcastle 8%, and Birmingham 11%.
Business and employment are play a key role in a region’s economic success, the presence of world-leading companies is a vote of confidence in that area. Companies such as: Amazon, PwC, Deloitte, John Lewis, Sage, Ebuyer, Barclays, Mercedes-Benz, Rolls-Royce, and McLaren have made significant investment, and efforts to relocate key operations to regional cities beyond the capital.
High-quality accommodation is key to attracting renters and maintaining demand. Regeneration across the Midlands and the North has resulted in innovative developments taking centre stage in prime locales, including Hadrian’s Tower in Newcastle, Westminster Works in Birmingham, and Manchester’s Ancoats Gardens.
HS2, the UK’s biggest infrastructure project, will better connect the North and the Midlands to London. Birmingham will be the first city to benefit, followed by Manchester, Leeds, and Sheffield, as part of Phase 2. Once completed, the project will significantly reduce journey times across the country.