An extremely important factor for investors to consider when looking at new opportunities is the shifting tide in the property market. With London beginning to stagnate and yield lower results, spouting higher costs to match, it’s easy to see why eyes are beginning to look north of the capital’s admittedly powerful draw.
With this in mind, what are some of the factors that could convince investors to look to Northern areas such as Liverpool and Manchester? And do these factors outweigh the powerful draw that London may still hold? Let’s weigh up some of the positives and negatives of investing in these different cities.
As London’s property market becomes overcrowded, with rental costs having to drop as a result (thus generating lower rental yields and evidently a decrease in price growth), city-centre population growth is quickly on the rise in the north. A large portion of this increase can be attributed to professionals ‘north-shoring’: moving the business into a more thriving area.
Liverpool’s number of tech companies has skyrocketed in recent years, and the city has been described as a ‘tech-cluster’ with the components for a digital sector to rival London. The Baltic Triangle area is at the forefront of this dynamic shift, home to a variety of different software companies, game development studios, and even schools that work alongside industry partners to give young people an opportunity to aspire, and in turn head the businesses of tomorrow.
Rival city Manchester is very much in the same situation, as London suffers what some are referring to as a ‘living standards exodus’, with tenants able to find much better conditions, closer to their workplace, by relocating. It is no wonder then that many are looking for investment opportunities in this burgeoning area, and investment companies such as RW Invest are offering them. In Manchester, property prices are expected to grow by 22.8 per cent by 2022, as the population increases, and the demand along with it.
Culture & Tourism
Leisure and tourism is certainly worth considering in each area, as it can make an important impact on investment.
With Tottenham and Liverpool facing off against each other in the Champions League this year, both Liverpool and London are directly competitive in regard to football. Tottenham’s new stadium, having opened in April of this year, was a colossal one-billion-pound project that has certainly impressed fans. Liverpool, also with an ambitious project in mind, have plans for a large-scale expansion around their historical Anfield stadium. A project aiming to transform the surrounding grounds from derelict properties into a vibrant hive of shopping centres, it will certainly attract both tourists and tenants wishing to stay nearby.
London being the capital, many would say that It would have the upper hand in terms of tourism, and that would appear to be the case. In terms of fine dining, for example, the capital seems to take the cake. With Liverpool managing to hold on to merely one Michelin star restaurant, and Manchester failing to manage even that, London is already onto its dessert, ahead with a whopping 70 stars.
London is also much farther ahead in terms of its visitor count, with landmarks such as the irreplaceable Buckingham Palace, and it is estimated that at least 13% of those working in London are employed in the tourism sector, generating about £15 million a year.
While Manchester and Liverpool may not have the upper hand when it comes to Michelin star restaurants, however, the thriving independent food scene of these cities is definitely worth celebrating. Perhaps most notably, Liverpool is the birthplace of the independent restaurant chain, Mowgli. More and more eateries are opening up on a regular basis in the north-west, offering a range of eclectic cuisines.
Its famous sights and large tourist base may be an attractive draw, but the feasibility of investment in London seems further and further out of reach when looking at the leaps in cost; The average house price estimations speak volumes. According to Zoopla, the average house price in Manchester sits at £192,762, Liverpool at £175,853, and London at a staggering £654,826. London’s high barrier to entry for investors means that it’s market is continuing to meander, whilst the north thrives.
For these reasons, particularly when considering the above point about migrating talent, it would be safe to assume that an investment in London would be risky, and whilst no doubt still a powerful and integral part of the country’s identity, it seems like the northern countries, with their promising abundance of young talent, are worth acknowledging for a lucrative investment opportunity.