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Insight & Opinion

Cardiff: Is now the time to invest in this thriving city?

Author: Gemma

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There are many locations across the UK that offer great potential for property investors, from London commuter belt hotspots like Luton to exciting cities like Liverpool, which is currently offering investment opportunities in the hotel and student accommodation sectors.

One destination that is showing particularly promising signs of growth at the moment is Cardiff. The Welsh capital is benefiting from significant inward investment and is also witnessing encouraging trends including population and employment growth.

Here are some of the key areas where the city is taking some big strides forward, signalling a bright future for property for sale in Cardiff.

Transport and infrastructure

Some of the most significant recent developments in Cardiff have been transport- and infrastructure-related. One particularly noteworthy event – not only for the capital city, but for Wales as a whole – was the official removal of tolls on the Severn bridges, which had been in place for 52 years. The two bridges host 25 million journeys between south-west England and Wales every year.

Businesses welcomed the move, describing the toll as a “tax” that impeded trade, while the transport secretary at the time, Chris Grayling, said the change will “help transform” the Severnside economy.

It’s not only on the roads that there are significant initiatives underway, with the government recently announcing £58 million of new funding to upgrade Cardiff Central train station.

Mr Grayling said people travelling to and from Cardiff deserve a “modern, accessible station at the heart of their vibrant city centre”.

Alun Cairns, the secretary of state for Wales, added: “This funding will allow Cardiff to become an attractive tourist and commuter destination at a crucial time in the city’s regeneration.”

One of the most recent infrastructure announcements is the £50 million South Wales Metro Plus programme, which aims to provide a coherent approach to public transport across the entire area.

Councillor Andrew Morgan, chair of the Cardiff capital region, said the organisation has been collaborating with the Welsh government to ensure that schemes proposed in the first phase of Metro Plus will “utilise every opportunity to stimulate our regional economy”.

Ultimately, better transport links in the heart of the city will make Cardiff a more attractive place to live and work, fuelling housing demand and consequently boosting rental yields for buy-to-let property owners, as well as supporting capital growth on the real estate market.

Population and employment

Recent research has highlighted the scope for growth in employment and the overall population in Cardiff in the coming years.

Earlier this year, the Cardiff Capital Region Economic Growth Partnership unveiled an industrial and economic growth plan for south-east Wales, one of the key parts of which is identifying and developing the skills required to drive business and create a “highly skilled, motivated and forward-thinking workforce”.

The initiative will target a number of key sectors which, with support, have the potential to expand and thrive, such as:

  • Compound semiconductors and related supply chain
  • AI, data and cybersecurity
  • Financial technology
  • Creative economy
  • Life sciences (specifically medical devices and diagnostics)
  • Transport engineering

Growth in these industries will raise the profile of Cardiff as a business hub, making it a more attractive target for investment, as well as boosting employment, the property market and the local economy as a whole.

These encouraging trends were reflected in the Savills report Cardiff: Connecting the City, published in April 2019, which noted that the Welsh capital is set to see population growth of 25 per cent by 2034. The projected rate of increase exceeds all other UK core cities, surpassing even London.

Employment in Cardiff is expected to grow by 12 per cent by 2030, outpacing the wider UK forecast of eight per cent and bringing some 27,600 new jobs to the area.

Savills’ research also provided an insight into recent positive trends in the local property market, including a 6.1 per cent increase in house prices in 2018, compared to the England and Wales average of 1.9 per cent.

Business and investment

Positive trends in regional business growth, investment and the local economy are always encouraging for investors sizing up prospects in a new destination.

Cardiff is one of the cities set to benefit from plans to create a “new economic powerhouse” in the west of Britain. The Powerhouse for the West report, commissioned by Cardiff Council, Bristol City Council and Newport City Council, was recently presented to leaders from the worlds of politics, business and education at the House of Lords.

It made recommendations that could lead to significant improvements in infrastructure, investment, productivity and international connections in south-west England and south Wales.

Huw Thomas, leader of Cardiff Council, said: “This is just the start of the conversation and our next step will be to set up a leadership vehicle to shape this initiative and drive it forward.”

These are clearly positive signs for the future, but there are plenty of reasons for investors in Cardiff to feel confident about the local business and investment climate right now.

In 2018, 13 different start-up businesses in the city received more than £40 million of funding, with a particularly strong focus on the tech sector. That’s according to a recent edition of the KPMG Venture Pulse report on venture capital trends, which highlighted the entrepreneurial activity underway in Cardiff.

Kay Drury, partner at KPMG Bristol, said: “The number of separate investments in Cardiff shows that there is a strong entrepreneurial spirit in the city. This has been fostered through the availability of talent – whether homegrown through local universities or people relocating, support from local government, mentorship programmes and collaboration with established players.”

For property investors, entrepreneurship and business investment provide encouraging signs of strength in the local economy, which means rising employment, strong demand for housing and a good chance of ongoing capital growth in the years to come.

Collectively, these factors create a picture of an investment market that has significant scope for growth and the potential to deliver strong returns.

To find out more about property investment opportunities in Cardiff and elsewhere in the UK, contact Experience Invest today.

Investing in Cardiff

Cardiff Location Guide Launched

If you are considering investing in Cardiff, follow the link to access Experience Invest’s new Cardiff location guide. This online resource will be helpful to investors considering purchasing property in the UK. Click here to access the guide…

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