Why regional property investment is set to pay off after Brexit
- 23 Jan 2019
- In the press
With just over two months to go until Britain is due to officially leave the European Union – barring an extension to the scheduled withdrawal date of March 29th 2019 – it seems that the country is no closer to knowing the exact terms of Brexit than it was when the referendum result was announced back in June 2016.
The ongoing debate and lack of clarity around this issue is causing understandable uncertainty for businesses and the UK economy as a whole.
Property investors will be asking what this all means for the real estate market, particularly in the event of a no-deal Brexit, a subject that has been explored in-depth by Jerald Solis, Business Development and Acquisitions Director at Experience Invest.
One of the key trends the sector is likely to see in the coming year and beyond is the ongoing emergence of regional hotspots, which have shown that UK property investment is about much more than just London.
Potential in the regions
Trends outside the capital in recent times have given investors an insight into just how much regional markets have to offer.
In areas such as the north-west, north-east and the Midlands – specifically places like Liverpool, Newcastle and Birmingham – buyers can find properties that are considerably cheaper than those available in London, with greater scope for capital growth in the coming years.
As businesses, property owners and investors look ahead in anticipation of what Brexit could mean for the real estate market, this shift in focus from London to regional locations is a trend that could have real staying power in the years to come.
The ‘new north-south divide’ was one of the key trends highlighted by Your Move in its latest House Price Index. The report showed that annual growth in the north-west and the East and West Midlands is outpacing inflation, while the south-east, east and Greater London are “struggling to maintain growth at all”.
Hometrack has highlighted a similar trend in its UK Cities House Price Index, which showed that November 2018 saw London house prices fall for only the second time in 23 years.
Places like Liverpool, Newcastle, Cardiff and Manchester, on the other hand, continued to perform strongly. These were the only four cities where price growth was higher than at the same time a year earlier.
Looking ahead to 2019, Hometrack forecast price increases of up to five per cent in Liverpool, one of the most affordable property markets in the UK.
As Mr Solis has pointed out, it’s inevitable there will be some challenges in 2019 and a period of adjustment after Britain officially leaves the EU, but there will also be many opportunities for investors to benefit from new trends and changes in the market.
The right opportunities
Some of the most exciting and potentially lucrative opportunities outside London can be found in areas that have thriving student populations. This is a strong market, owing to the reliability of tenant demand and resulting rental yields.
In Liverpool, Experience Invest is currently offering eight per cent net rental returns assured for five years Aura Student Liverpool.
Opto Student Newcastle is another project that provides a route into the fast-growing student accommodation market in a destination that has witnessed strong price growth in the past year.
Whatever Brexit brings, there is little doubt that these sorts of investments will continue to prove popular and deliver results throughout 2019 and into the future.
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