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INVEST NORTH WEST!
Are these boom times for property in the North West? While
estate agents and developers in other parts of the country
are tightening their belts, it seems that barely a week goes
by without another innovative refurbishment or new-build scheme
being announced in Manchester or Liverpool.
“The medium-term forecast would seem to be especially promising
for the North West.”
Invest North West!
How long are the good times going to last, and how can
property investors make the most of them?
In Manchester alone, new developments are still coming
onto the market at an astonishing rate. Urban Splash has
just unveiled two buildings - Moho and Burton Place - in
up-and-coming Castlefield. The company also has new homes
at New Islington - Manchester's Millennium Community, and
the first apartments in the UK designed by architect Will
Alsop. In Spinningfields, Manchester boasts the largest
new development in Europe. Abito, meanwhile, has had its
ultra-modern living pods - "compact apartments",
squeezing in every imaginable amenity - snapped up in Greengate.
The story is similar in Liverpool, with many stylish new
living spaces on the horizon, including City Lofts' towers
at Princes Dock, and Downing Developments' Lennon Studios,
on the site where the former Beatle was born.
Would there have been this demand for different types of
accommodation even ten years ago? Not according to Les Lang,
managing director of Abito. "There's been an amazing
transformation", he says of Manchester, "and this
has had a huge effect on the housing market. Things really
started to take off for the city with the first Olympic
bid, and Manchester airport has been crucial to its development.
Manchester has become much more cosmopolitan. Now we have
parts of the BBC and even MI5 moving here!"
These high-profile investors are only the most obvious
signs of a much more widespread economic boost that the
North West has experienced in the last few years. Figures
from the Northwest Regional Development Agency (NRDA), published
in February 2005, show that economic growth rates in the
region have overtaken the UK average in the years since
1998, particularly in Greater Manchester, with employment
rates rising rapidly in some areas. The NRDA forecasts continued
growth in the next few years in population and employment,
particularly in financial and business services.
What this economic boom has meant is that there is now
a much bigger market for high quality, innovative property
developments in the North West. And not just in the centre
of Manchester and Liverpool: Urban Splash has just completed
the first phase of its Budenberg HAUS Projekte development
in Altrincham (the site uses combined heat and power - a
first for Urban Splash - to reduce CO2 emissions).
With all these recent developments in the North West, are
there opportunities for investors? Buying to let is always
the tempting option in areas where things are taking off,
with the lure of additions to a property portfolio that
can pay for themselves,through rental yields and capital
gain. But are there still gaps in the buy-to-let market
in the North West? Isn't it as saturated as the Pennines
on a rainy day?
Certainly first time investors are at the back of the queue:
there has been a phenomenal expansion in buy-to-let in the
last 2 to 3 years. But the signs are that, though things
may have cooled off slightly in recent months, there are
still openings for wise buyers.
The latest report on the buy-to-let market, issued in March
by Nationwide's specialist lender, UCB Home Loans, gives
grounds for cautious optimism. According to UCB managing
director Charles Reed, while rates won't be as high as they
have been, "We are expecting growth to continue over
the next few years." The UCB report shows that experienced
investors are still adding to their portfolios of buy-to-let
The medium-term forecast would seem to be especially promising
for the North West. UCB says that, when considering where
to look, investors should bear in mind prospects for increasing
employment, growth in student numbers, and prospects for
transport and other infrastructure development. The North
West scores highly in these areas, for example with the
recent merger of Manchester's universities. A major influx
of large organisations such as the BBC can also help to
bolster demand for rented accommodation.
So what should prospective buy-to-let investors be looking
for? According to Gary Needham of property investment advisors
Blenheim Bond, as well as looking in the most obvious places
in the heart of Manchester and Liverpool, it's a good idea
to consider areas towards the periphery valued at less than
£150,000. "Look at areas where regeneration is
only getting started, rather than places where you're coming
late to the party," says Gary. "And be very careful
to ask letting agents what they need - what types of properties,
in which locations, the lettings market is currently short
of. There are no real secrets in property investment - it's
all about research."
For investor Adam Ingrams, too, who has a large buy-to-let
portfolio in the North West, to make buy-to-let work now
takes more homework than it did. "Look in areas that
are adjacent to places that are already fashionable,"
he says. "And for unbiased advice, try ringing the
planning department of the local council. You can also get
to predict patterns of regeneration by looking at where
the Government is targeting investment in new homes and
businesses (for example, by getting information from the
Office of the Deputy Prime Minister), and by finding out
the areas where house prices are low compared to others
nearby (the Land Registry has this kind of information).”
“Bargains are still to be had in buy-to-let, but investors
need to take more of a long-term view when planning the
purchase of a property. It's sensible to plan to hold on
to a property for at least ten years, during which time
it should be able to provide a steady rental income - you
can no longer depend on capital gain."
Though they may have to work harder than they did, then,
it seems that it's not too late for new landlords to make
money from the buy-to-let market, and make the best of the
Do your research: Nwda.co.uk for regional
development agency statistics/economic strategy Englandsnorthwest.com
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