Foreign investors targeting Manchester Liverpool buy-to-rent


Foreign investors targeting Manchester Liverpool buy-to-rent

20 Sep 2018

Foreign investment

Weak pound trading 15 percent below the summer 2016 rates discounted UK properties for foreign investors. Prime locations in London commercial markets are trading 50 to 60 percent more than peaks rates, and outside London, the prices are still below 2009 levels. High prices in the capital city and Brexit uncertainty turned off investors. The foreign investor is seeking properties in this market. The investors believe, although there has been a lot of speculation on Brexit – the market is still stable. Most buyers are keen to get ownership to the property with 15 to 20 years of income opportunity.

In the first eight months of the year, South Korean buyers invested £2.2 billion in UK real estate that was £530 million more as compared to 2017.  The investors are seeking options in alternative growing cities such as Manchester, Leeds, Liverpool, and Birmingham. Investors are coming back to UK high yield cities as Manchester and Edinburgh offer growth more than 4 percent, while, Frankfurt offers yield around 3 percent.

The head at the European real estate at Barings said US investors are investing in risky projects. Baring invested in residential property in Manchester and is looking for new properties in Liverpool and Leeds to put at least 1,000 units together. This year more than two-thirds of the investment by US buyers were made outside London which involved transactions of more than £3 million as per property investment firm Datscha. The total investment by US investor in the UK in 2018 till mid-August was up to 3.1 billion as per the data of Real Capital Analytics.  

Growing demand in Manchester

The price in Greater Manchester grew at the rate of 4.1 percent in 2017-2018 as per ONS records, and the average house price was £365,180. The growth rate is 1 percent more than the national average of 3 percent and there has been a rise in inflow of funds from the US, EU and Asian investors in the city. There is a demand for residential, commercial properties and increased numbers of buyers are searching niche properties in self-storage, senior housing, and private rental sector.

Booming rental markets

Short term rental increased by more than 200 percent in at least 10 UK cities from 2015 to 2016 as per the Residential Landlords Association.

The service apartment in Manchester, Liverpool, and Bristol are 86 percent occupied as per 2016 Association of Serviced Apartment Providers report.

Such investments offer growth like a commodity as there is increasing demand for housing and rental accommodations in the region. Recent reports of new built-to-rent schemes in Manchester and Liverpool involved the deal between the developer Brickland and the US real estate investor Heitman. The investment includes two sites, where, in Manchester, two towers of 16 and 19 stories will be created, and in Liverpool, nine-story developments, which will be called the Baltic Triangle, will be constructed, where 200 residential units will be built.

Some locations in Manchester are known for short-term rentals e.g. the Northern Quarter.  On the other hand, the Liverpool city council is proactive and introduced regulations to register short-term rentals.  

To find out more about UK buy-to-let options, click Hamilton International Estates (www.hamiltoninternationalestates.com).

 

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