The current generation of young people in the UK are bucking the trend set by their forebears and making a ‘rapid return’ to city-centre living, according to findings from the Centre for Cities.
Figures show a substantial increase in city-centre populations in recent decades, with the north of England driving the trend.
Liverpool leads the way
Inner-city populations in the UK increased rapidly in the late 19th and early 20th centuries, but a generation ago the country witnessed a reversal of this trend. Residents gradually headed out of cities to live in new, more spacious towns and suburbs.
According to the Centre for Cities, however, in recent years there has been yet another turnaround, with young students and professionals forming their own ideas of how they want to live. People have been steadily returning to urban centres, drawn by career opportunities, desirable living space and lifestyle benefits.
In an article for the BBC, Paul Swinney and Andrew Carter of the Centre for Cities described this as a “dramatic urban renaissance”, which has been particularly evident in northern England and the Midlands.
Analysis of data from the Office for National Statistics shows that Liverpool has led the way in city-centre population growth in recent decades. Between 2002 and 2015, the number of people living close to the centre of Liverpool increased by 181 per cent, from 9,100 to 25,600.
Birmingham (163 per cent), Manchester (149 per cent) and Newcastle (113 per cent) also witnessed substantial increases in their populations over the same time period.
What is driving this trend?
Compared to 30 years ago, many modern city centres have a lot more to offer residents, particularly students and young, affluent professionals.
A steady flow of development has given rise to luxury apartment blocks, office buildings, cafes, bars, restaurants, gyms and many other features that appeal to the young and the career-minded.
The Centre for Cities analysis highlighted a 208 per cent increase in Liverpool’s city-centre student population between 2001 and 2011, with 6,300 more college and university attendees choosing to live there.
Young professionals, meanwhile, have been drawn to urban centres by the high-skilled, well-paid employment opportunities on offer. The number of 20 to 29-year-olds living in city centres tripled in the first decade of the 21st century, with more than half of the residents of these locations working in skilled, professional occupations.
This has supported local businesses, with increased demand helping to sustain all manner of leisure establishments and commercial ventures. The availability of gyms, restaurants, bars, shops and other amenities has, in turn, made city-centre living even more appealing.
What does this mean for investors?
The rising desirability of city-centre living links directly to a key factor buy-to-let property investors take into account when evaluating future prospects: tenant demand.
Need for desirable living space in popular, convenient locations means high occupancy levels, a low risk of void periods and a strong likelihood of healthy, consistent rental yields.
There are some exciting opportunities waiting to be seized in some of the increasingly popular city-centre locations highlighted in the Centre for Cities research.
Liverpool, for example, offers a range of student and residential accommodation investments such as Infinity Waters, which has the added benefit of a 15 per cent early investor discount, and the Aura Student development in the flourishing Knowledge Quarter.
For investors looking at Newcastle, Experience Invest is currently offering incentives including eight per cent net rental returns assured for five years at the Opto Student Newcastle building, which offers easy access to the city’s two main universities.
In the south of England, buyers can benefit from strong, ongoing demand for housing in London’s commuter belt by investing in Imperial Square in Luton. This apartment complex will offer the joint appeal of town-centre living and convenient transport links to the centre of the capital.
As well as providing attractive opportunities for investors, developments such as these help to ensure that town and city centres can continue to meet growing demand for urban living.