Savills have reported huge annual house price growth in the key regional cities of Edinburgh, Birmingham and Manchester’s property markets. This is far exceeding rates for London and the UK as a whole. The UK average was 4.1% with London only seeing 1.7%. Compare these figures to Edinburgh’s 9.9%, Birmingham’s 9.7% and Manchester’s 8.7% and it’s easy to discover the country’s property hotspots as Edinburgh, Birmingham and Manchester’s property markets surpass London.
Leading the pack is Edinburgh; a city that has witnessed population growth by 24,540 over the past five years and now exceeds 500,000. Scotland’s capital is a truly international city, welcoming millions of tourists and new residents from around the globe each year. 3,000 new homes are expected to be constructed by 2023. There is also major regeneration work being undertaken throughout the city. Edinburgh has a reputation as a leading location for business and living. Something developers will have to take care not to impede as the city expands.
Birmingham is successfully repositioning itself as a major regional city thanks to significant investment in its infrastructure, redevelopment and commerce. HS2 is giving more people the opportunity to work and live in Birmingham and construction projects such as the 43-acre Port Loop site are creating new places for them to live. Despite this, there is still a huge lack of housing for the growing population. This is especially true of the large number of young people who require high-quality, city-centre living.
As well as city-centre developments aimed at the under-25s who make up 40% of Birmingham’s population. Developers are also answering the needs of families who want to remain in the city rather than move to the suburbs. Many major international companies have relocated to Birmingham, including HSBC and Deutsche Bank. The creation of new job opportunities will only continue to drive new residents to the city, thereby further increasing house price growth.
With the second largest number of Foreign Direct Investments in the UK in 2017 – following only London – Manchester is proving itself a genuine alternative to the capital for businesses, residents and investors.
Another city that will benefit from HS2, investment in Manchester’s transport infrastructure is helping attract market-leading businesses. With them skilled employees who want to take advantage of the healthy job market. The tech and media sectors are especially booming as graduates from Manchester’s universities remain in the city to create a highly qualified talent pool of 18 to 35 year olds. This has led to high numbers of renters with major demand for housing. Consequently, also great rental yields and capital growth.
Although housing construction has increased in recent years, there is still a large undersupply in the city. This is creating an excellent market for investors. To find out more about these markets, and some of the options being generated to supply this need, check out our UK buy-to-let area.