In recent years, more and more businesses are upping sticks and relocating to UK cities outside of London. In a trend known as ‘northshoring’, companies are moving to northern cities with the aim of trimming costs and finding new ways to maximise spending power.
These moves not only see retained staff travelling north with their employers but offer fresh opportunities for residents in cities like Leeds, Birmingham and Manchester.
These moves have had a significant impact on regional property investment and house price growth, as the influx of those seeking employment increases demand for homes, both to buy and rent.
Why has northshoring soared in recent years?
Businesses are not only seeing the attraction in regional cities to reduce their own outgoings but are recognising the opportunity in enticing new and retaining existing staff, with everyone feeling the pinch thanks to London’s sky-high property prices.
Manchester is the most popular choice for businesses moving out of London. It is the fastest growing UK city with a population increase of over 50% between 2001 and 2011, with more expected. It is also second only to London in terms of student retention at 51.5%, as graduates stick around thanks to new employment prospects.
How is northshoring impacting residential investment?
Regional cities such as Liverpool and Birmingham have seen the development and sales of commercial spaces boom over the last few years. In Manchester, construction of new offices has vastly outpaced that of London, attracting hundreds of new residents and property investors to the Northern Powerhouse and Midlands Engine cities.
Recognising the impact of these new businesses to their cities, the high street is following suit. New amenities such as bars, restaurants, cafes and shops increase appeal to these new residents, so it’s no wonder apartment prices in Manchester have increased 52% in the six years between November 2011 and 2017 and show no sign of slowing with City centre living is in high demand.
This is having a positive knock on effect on residential property values with demand for city centre living higher than ever.
Buyers can get much more for their money in cities like Manchester, thanks to the average apartment in London costing a staggering £560,042, compared to just £255,000 - £350,000 for a two bedroom flat at developments such as The Hallmark.
For investors, capital growth potential in Manchester and other regional cities is staggering in comparison to London as renters are tempted away from the capital, meaning demand for quality housing in regional city centres is unprecedentedly high, which in turn indicates strong yield prospects. At The Hallmark, for example, rental yields of 6% are anticipated. JLL predict property growth in Manchester of 28.2% between 2017 and 2021. To find out more about investing with Forty/8, check out money blogger Emma Drew’s top tips.
Forty/8 currently has a collection of stunning apartments in Manchester that are available to buy now. For more information, click here.