Demand for Manchester property rising among GCC investors

Demand for Manchester property rising among GCC investors

The north-west city is an investment hotspot firmly on the radar of buyers based in the UAE, Saudi Arabia and the wider GCC region, new research reveals.

Summary:

  • Manchester is the most popular UK city behind London for property investment among investors based in the GCC
  • Over double the proportion of investors would choose to buy property in Manchester over the next most appealing city, Liverpool
  • The attractiveness of London is declining – here’s why more GCC investors are looking towards Manchester to achieve the growth they desire

Manchester is one of the most popular UK cities for property investment among buyers located across the GCC region – and demand is rising.

The appeal of the north-west city was highlighted in the GCC Investor Report 2018, a YouGov survey commissioned by Select Property Group.

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13% of investors surveyed declared that they would choose Manchester to invest in property in the UK.

The majority (54%) of respondents chose London, perhaps naturally as the UK’s capital city. However, this demand for real estate in London is declining, with low yields and falling growth levels prompting more buyers in the GCC to focus key UK regional cities.

Boasting the highest yields and strongest levels of property growth, Manchester is the UK’s number one investment city and is becoming a hotspot for GCC investment. Liverpool (5%) was the most popular city after Manchester, followed by Oxford and Cambridge (3% respectively).

A city with a thriving economy

Valued at £59.6 billion, Manchester’s economy is the largest outside of London and continues to expand rapidly.

Home to 80 of the FTSE 100 listed companies and brands such as Adidas and the BBC, 55,000 new jobs in the city centre alone are set to be created by 2025.

It was also the first city to receive devolved mayoral powers as part of the UK government’s ‘Northern Powerhouse’ project, with the city expected to receive multi-billion pounds worth of global institutional investment in the coming years.

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A rising population putting huge pressure on the property market

Between 1996 and 2016, Manchester’s economy doubled in size, and its population increased by 28%, almost 17% faster than the average among major UK cities. It’s expected to increase by a further 125,000 by 2025, growth almost 15 times the rate new homes in the city are currently being built at.

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Investors achieving the highest returns in the UK

Apartment prices in Manchester increased 52% in the six years between November 2011 and 2017.

Last year, the average sales price of a two-bedroom apartment in the city increased by 8%, with the average rent price of the same sized unit also increasing by 3.2%.

Between 2018 and 2022, Manchester’s projected average residential property prices will rise 81% faster than the UK average, with average rental prices forecast to grow 40% faster than the national average, too.

Analysis: Adam Price, Managing Director Select Property Group

The shift in focus towards Manchester in recent years among GCC buyers is something that’s been particularly noticeable here at Select Property Group, with a significant proportion of properties in our new developments in Manchester having been sold to investors based across the region.

Quite simply, London can no longer offer the levels of growth it once did 10-20 years ago. Prices are reaching an affordability ceiling and, when coupled with slow yield growth, makes property in the capital an increasingly difficult investment to justify.

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But those familiar with the huge growth cycle London once enjoyed have recognised that something similar could be happening in Manchester right now. With low supply and strong growth forecasts, it presents a huge opportunity for investors to enter the market just as the city begins an exciting period of economic development.

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