UK PROPERTY INVESTMENT GUIDE / 2021
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UK INVESTMENT GUIDE | 1 UK PROPERTY INVESTMENT GUIDE / 2021
UK INVESTMENT GUIDE | 3
2021
COULDN’T
BE MORE
WELCOMED
Following nearly a whole year of
lockdowns, restrictions and significant
changes to how we go about our day
to day activity whether for work life
of homelife, 2020 ended on a much
happier note than we could have
hoped for.
The Brexit trade agreement, seven days has proved to be a fairly robust and stable
before its deadline, proved an undoubted UK property market with an average of
relief for many within the UK’s investment 4.7% growth in property prices over the
market. Following four and a half years of duration of 2020.
unknown and uncertainty, property experts
and investors are monitoring the UK Over the past 12 months, Salboy has
closely, as British assets work to catch continued with construction across all of
up with overseas markets. its sites and has the supply ready to meet
growing demand. Its portfolio provides
This news, coupled with the approval of a range of first-class accommodation
a mass roll out of a Covid-19 vaccine, has opportunities in the North West including
provided investors with the comfort they Manchester and Salford and can provide
required to continue on investing in UK investors with a product, set to deliver
property despite the country’s economic significant gains in rental yield and
challenges. These investors will no doubt capital appreciation.
carry on reaping the benefits from what
2
UK INVESTMENT GUIDE | 5
UK
CONSTRUCTION
MARKET
REMAINS OPEN
FOR BUSINESS
Despite the pandemic, the housing November 2020, up by a remarkable
market has been extremely busy since it 44% on the same period in 2019.
first re-opened again in the middle of 2020, Rightmove also predicts that following the
and the increased demand for property end of the stamp duty holiday we’ll see a
has continued into the first few days of slower second quarter however, even with
2021. RightMove stated that Monday 4th the average price in Britain up by 6.6%
January 2021 was its busiest day since this year, cheap mortgage rates that are
early September with over six million visits, available for some leave scope for further
meaning it was the busiest ever start to a modest price growth – despite the loss of
year, and it’s around 30% busier than at the the tax saving.
start of 2020.
Finally, experts at Rightmove have said that
In an article published by Rightmove in whilst uncertainties remain in 2021, housing
December 2020, it stated that its main needs and fresh-start mentality suggest
prediction is that the recent surge in aver- that the market will continue to outperform,
4%
age asking prices will continue into 2021, as shown by 53% more prospective buyers
as the nation’s housing needs are likely contacting estate agents than at this time
to outweigh any economic uncertainty. one year ago.
Specifically, its forecasts a robust 4%
NATIONAL AVERAGE national average house price growth in
HOUSE PRICE 2021. Despite the deadline for stamp duty
GROWTH IN 2021 holiday in March, around 130,000 sales @iamjsullivan
Rightmove were agreed in
4
“INVESTMENT IN EUROPEAN
75%
Global law firm, DLA Piper recently Commenting on the findings, Olaf Schmidt,
published its UK and EU investment survey Real Estate partner and Managing Director
RESIDENTIAL REAL ESTATE OF INVESTORS PLAN
results, revealing that nearly three-quarters
of investors plan to invest in European
residential assets over the next twelve
of Practice Groups at DLA Piper, said:
“Investment in European residential real
ASSETS HAS BEEN TRADITION- TO INVEST IN EUROPEAN
RESIDENTIAL ASSETS OVER
THE NEXT 12 MONTHS
months. The survey of 500 investors,
developers, and asset managers with more
estate assets has been traditionally consid-
ered a market for local investors and it was
ALLY CONSIDERED A MARKET
than USD3bn AUM from across Europe, largely dominated by local asset managers.
DLA Piper Investment Survey results China and the US, ranks the UK highest for High barriers to entry due to the existence
future residential real estate investment. of different national market practices and
FOR LOCAL INVESTORS AND Indeed, from those surveyed only 11% of
investors feel negative about the current
outlook for the European Real
legal systems made it difficult to enter this
market. However, over the past few years
this has changed. Residential developers
IT WAS LARGELY DOMINATED Estate Market. went international, asset managers
have created teams specialised in the
BY LOCAL ASSET MANAGERS.
The top reasons respondents cited causes residential market segment, institutional
to be optimistic were that there is high capital opened up, and asset managers
demand due to a shortfall in supply (43%), can now invest in the various forms of
HIGH BARRIERS TO ENTRY DUE real estate income yields are higher than
those for fixed income (43%), and asset
prices remain attractive (40%).
residential assets across Europe.”
TO THE EXISTENCE OF DIFFER-
ENT NATIONAL MARKET PRAC-
TICES AND LEGAL SYSTEMS
MADE IT DIFFICULT TO ENTER
THIS MARKET. HOWEVER, OVER
THE PAST FEW YEARS THIS UK IS TOP
HAS CHANGED. RESIDENTIAL
DEVELOPERS WENT HOTSPOT
INTERNATIONAL, ASSET MAN-
AGERS HAVE CREATED TEAMS
FOR EUROPEAN
SPECIALISED IN THE RESIDEN-
TIAL MARKET SEGMENT, INSTI-
AND OVERSEAS
TUTIONAL CAPITAL OPENED @chriscurry92
RESIDENTIAL
UP, AND ASSET MANAGERS
CAN NOW INVEST IN THE VAR- INVESTMENT
IOUS FORMS OF RESIDENTIAL
ASSETS ACROSS EUROPE.” POST-BREXIT
7
UK INVESTMENT GUIDE | 9
NORTH WEST
LEADING
THE WAY RENTS
IN FIVE YEAR
Savills reported that rental values have A report undertaken by Savills in the
shown more resilience than capital values summer of 2020 reviewed its autumn
during the downturn with rents falling 2019 five-year residential price forecast.
just -2% following the Global Financial The forecasts for 2025 remain unchanged;
Crisis (GFC), whereas house prices fell however, specific changes had been
GROWTH
-18%. It predicts that rents will also remain made to the year on year growth pattern,
relatively resilient in the coming months demonstrating that the North West of
and years based on its forecasts from England is expected to lead the way with
November 2019 on rents continuing to a 24.1% increase in residential property
FORECAST
rise in line with income growth. prices over the five year period.
Revised income growth forecasts from Oxford Economics estimates that the Bank
Oxford Economics, suggests we are likely of England base rate will remain at just 0.1%
to see rents rise 13.6% by the end of 2024, until Q2 in 2022. The rate is then expected
slightly lower than the 15.4% growth to rise gradually. This could entice more
predicted previously. Taking this together people within 18 months to take the plunge
with its price forecasts, it suggests rental and buy a home, especially in areas with
yields will be slightly lower in 2024 relative strong price growth potential like the
to today, in line with lower interest rate North West.
expectations. However, yields will fluctuate
over the short term. This could create
attractive opportunities for investors willing
to hold for the long term.
2021 2022 2023 2024 5 year
North West 8.5% 9.0% 7.0% 6.0% 24.1%
Yorkshire & The Humber 3.0% 10.0% 8.0% 7.0% 21.1%
13.6%
Scotland 7.0% 8.5% 6.0% 5.5% 20.1%
North East 2.0% 10.0% 8.0% 7.0% 19.9%
LIKELY INCREASE East Midlands 7.0% 7.5% 5.5% 5.5% 18.4%
IN RENTS BY 2024
Oxford Economics West Midlands 2.0% 10.0% 7.0% 6.5% 18.4%
Wales 2.0% 10.0% 7.0% 6.0% 17.7%
24.1%
LIKELY INCREASE IN
South West
South East and East
3.0%
8.0%
8.0%
5.5%
5.5%
2.5%
4.0%
2.5%
12.9%
10.7%
RESIDENTIAL PROPERTY
London 6.0% 3.0% 1.5% 1.5% 4.0%
PRICES IN NORTH WEST
OVER THE 5 YEAR PERIOD UK 5.0% 8.0% 5.0% 4.5% 15.1%
Savills
8
UK INVESTMENT GUIDE | 11
LONDON
VS The UK’s Fastest
Levels of Growth
THE NORTH
Regional price forecasts
2020 5 year
North West +2.5% +24.0%
Yorkshire & Humber +2.0% +21.6%
West Midlands +3.0% +18.2%
East Midlands +3.0% +18.2%
Before the pandemic, investors (when Indeed, over the past 24 months
South West +0.5% +13.1%
looking at property investment opportunities Manchester has further cemented its
in the UK) were likely to consider Central position as the most attractive city centre Greater London 0.0% +10.9%
London or one of the UK’s city regions, residential investment market in the UK.
in particular the North West. Despite national and global turbulence, SCOTLAND London +2.0% +19.9%
Manchester’s momentum has continued
Recent studies have proved that despite to grow and is forecast to continue on an Wales +2.0% +18.1%
its bright lights, hustle, bustle, heritage and upward rise up to 2022.
South East 0.0% +10.9%
majestic grandeur – Central London is NORTHERN
showing the UK’s slowest level of growth IRELAND
NORTH North East +1.5% +19.9%
over a five-year period.
Prime Central London -2.0% +4.0%
NORTH
WEST
YORKSHIRE
House price growth % pa 2018 2019 2020 2021 2022 2018-22*
Manchester 6.5 4 3.5 3.5 3.5 22.8
EAST
Liverpool 4 3 3.5 3.5 3.5 19.3 MIDLANDS
Leeds 3.5 4 3.5 3.5 4 19.9
WALES WEST
MIDLANDS
UK 1 2 2 3 3 12.6
EASTERN
Rental growth % pa 2018 2019 2020 2021 2022 2018-22*
Manchester 3.5 3 3 3.5 3.5 17.6
LONDON
Liverpool 3.5 3 3 3.5 3.5 17.6
SOUTH WEST SOUTH EAST
Leeds 3.5 4 3.5 3.5 3 18.8
UK 2 2.5 2.5 2.5 2.5 12.6
JLL’s The New Housing Paradigm Residential forecasts – Northern England UK Residential Research | February 2018 Oxford Group
10
UK INVESTMENT GUIDE | 13
WHY
GREATER In 2019, The data revealed that the City of Manches- the city has to offer. The ten metropolitan
ter’s population rose by an additional 5,231 boroughs of Greater Manchester – Bolton,
people between 2018 and 2019, giving it Bury, Manchester, Oldham, Rochdale, Salford,
the Office of a new population of 552,858. The city Stockport, Tameside, Trafford, and Wigan –
MANCHESTER
breached half a million people in 2011 and represent the largest city region economy
National Statistics is due to hit 600,000 by the middle of this
decade. This makes Manchester England’s
outside London, with a gross value added
(GVA) of £62.8 billion. With up to 40%
revealed that fastest growing city. lower operating costs than London it is no
surprise that Greater Manchester is the
Manchester’s This growth, supported by a rising
population of more than 2.8 million people
chosen location for business.
population grew in the Greater Manchester conurbation,
demonstrates how Manchester’s housing
Over the past decade, the Greater Manches-
ter region has benefitted from a multi-bil-
faster than any demand continues to outstrip supply and
its lower cost of living is one of the main
lion-pound injection of public / private sector
investment for business and infrastructure
reasons why people choose to move here and continues to boast the UK’s largest
other English city from the capital. regional Airport with connections to over
200 countries worldwide. The government’s
in the year to Students, Alumni, young professionals and
young couples are more and more looking
pledge to invest a further £7 billion into North-
ern Powerhouse infrastructure proves that
In 2019, the Office of National Statistics summer 2019. for a life which can provide everything they
need on their doorstep and they are flocking
Manchester is ready and waiting to unlock
that investment and to continue to underpin
to Manchester in order to experience what Manchester’s reputation as a global city.
revealed that Manchester’s population grew
faster than any other English city in the year 260,000
to summer 2019. Total Household Demand
Minimum household demand
plus latent demand built up
within the existing population -
250,000
including hidden or as yet
552,858
unformed households
Minimum Household
Demand
Number of homes required
MANCHESTER POPULATION 240,000
to adequately house the
IN 2019 city’s growing population
The Office of National Statistics
£7BN 230,000
GOVERNMENT PLEDGE
TO INVEST INTO
NORTHERN POWERHOUSE
INFRASTRUCTURE 220,000
The Office of National Statistics
210,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
WATCH THIS IS GREATER
@hala097
MANCHESTER VIDEO Existing Housing Stock
12UK INVESTMENT GUIDE | 15
UK A recent surge of regeneration and
financial investment in Salford has seen
investment opportunists looking to
Manchester’s desirable neighbour for
under construction thanks to several
multi-million-pound regeneration schemes.
Salford Quays and MediaCityUK, together
with a first-class university and upcoming
CONSTRUCTION
their next purchase. student district al serve as the city’s main
attractions, which understandably makes
Indeed, the ONS revealed in 2019 that it one of the more desirable districts for
RELOCATION OF THE
England’s second-fastest growing city is tenants and investors.
BBC AND ITV STUDIOS in fact Salford and grew by 4,426 people
MARKET
between 2018 and 2019. Salford is a popular place to live for the
4,426
younger, digital focussed renter – from the
Over the past few years, the city has seen initial relocation of the BBC and ITV studios,
a new calibre of businesses taking resi- many employees chose to move up from
REMAINS OPEN
dence in the city, increasing employment London and found themselves a home
POPULATION GROWTH IN levels and acting as a catalyst for new, in Salford, thus leading to significant uplift
SALFORD BETWEEN 2018 exciting property developments either in demand.
AND 2019 completed or now
FOR BUSINESS
WHY
15
SALFORD @simonwatkinsonUK INVESTMENT GUIDE | 17
ABOUT
At Salboy we have a strong, proven track
record for delivering quality, first-class
developments without compromise.
With a strong financial backing, we have
SALBOY
delivered over 2,400 homes and have
created over 3,500 jobs through doing so. FIFTY5IVE, VIADUX,
Our goal is always to develop for the long MANCHESTER & SALFORD CITY CENTRE MANCHESTER CITY CENTRE
term – astutely, sensitively, and with a UNDER CONSTRUCTION UNDER CONSTRUCTION
sense of social purpose – delivering the
homes and workspace that our UK cities Designed by Jon Matthews Architects, Fifty5five provides The elegant 40 storey tower, designed by internationally
so desperately need. Because of approach, a totem for the entrance to the Greengate Masterplan area. renowned Simpson Haugh Architects, will feature high quality
we boast higher occupancy levels than With a primary frontage facing Trinity Way the scheme is one, two-bedroom apartments and will benefit from extraordinary
other developments and, despite the composed of three distinct blocks, arranged around a central views across the city centre skyline.
pandemic, we have seen consistency in core to provide a series of high quality apartments and duplexes.
our rental rates throughout 2020. Resident’s amenity space includes south facing roof terraces
and a communal resident’s lounge.
We are North West based and we invest
our own money, time and resources into
large scale developments in particular,
in Manchester and Salford. We believe
that these cities have what it takes to
provide truly unique places for people to
live, work and play. We have confidence
that both cities will come back from this
downturn stronger than ever with a true
and determined Mancunian and
Salfordian spirit.
If you are interested in investing in any
At Salboy we have a strong, proven track Weour
of aredevelopments
North West based andinwe
then get invest
touch,
record for delivering quality, first-class ourdown
we’ lovemoney, time
to talk to and resources into
you.
developments without compromise. large scale developments in particular,
With a strong financial backing, we have in Manchester and Salford. We believe that
delivered over 2,400 homes and have these cities have what it takes to provide
created over 3,500 jobs through doing so. truly unique places for people to live, work
Our goal is always to develop for the long and play. We have confidence that both
term – astutely, sensitively, and with a cities will come back from this downturn
sense of social purpose – delivering the stronger than ever with a true and deter-
homes and workspace that our UK cities mined Mancunian and Salfordian spirit.
WATCH THIS IS GREATER so desperately need. Because of approach,
LOCAL CRESCENT, THE PRESS,
MANCHESTER VIDEO we boast higher occupancy levels than If you are interested in investing in any MANCHESTER CITY CENTRE MANCHESTER CITY CENTRE
other developments and, despite the of our developments then get in touch, COMPLETE COMPLETE
pandemic, we have seen consistency in we’d love to talk to you.
our rental rates throughout 2020. Local Crescent is a unique community comprising 399 A modern conversion in the business district of N.O.M.A. A key part
Simon Ismail – Managing Director Salboy apartments and seven townhouses spread across three distinct of Manchester’s history is this Grade II-listed building, which is now
towers with uniquely striking façades. Heated swimming pool, reborn as The Press. Comprising 66 New York-style apartments,
DOWNLOAD OUR FREE Simon Ismail – cinema room, yoga studio, gym, laundrette, courtyard gardens, The Press blends thoughtful design and premium materials, with a
ROI EXCEL TOOL Managing Director Salboy coffee shop, solarium, sauna & spa. wealth of original features.
16© Salboy Ltd 2020. All rights reserved. Salboy is a registered trademark (UK00003374975). Salboy Limited is a registered company in England and Wales (Company #09123542) & Salboy International Limited t/a Salboy is a registered company in England and Wales (Company #10739544) with registered offices at Unit 3 Birchwood One Business Park Dewhurst Road, Birch- wood, Warrington, England, WA3 7GB. Salboy International Limited is a member of the Property Redress Scheme (Member #PRS020066) and adheres to its Code of Practice. 18
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