Property has track record of success that few other options can match. There are few investment opportunities that can claim the same consistent level of reward.
Why is property such as popular option for investors?
When it comes to deciding where to invest next, there is little doubt that property is, and probably always should, be on the agenda. Many of our clients have multiple investments in a range of properties and often other markets as well. Shrewd investors have been acquiring property as standard practice for hundreds of years and main reasons why hasn’t changed. Property pays a good return in several ways. As with any financial strategy though it will not be right for some, so below are just a few thoughts on the current property investment market, particularly when it comes to city living.
- You are investing for the long term
Property is not usually a quick return. Most of our seasoned investors look to their property portfolio as a long game strategy. Values rise over time and that increase has also been consistently above the rate of many other investments. Of course, there are property developers who will look to ’flip’ an investment quickly but that is a much more volatile market and a more intense process. If you are looking to a quick investment return, then clearly rental property may not the best option. If you are playing a longer game, then it is certainly worth more than a look.
- Developing areas offer a good return
One of the big decisions to be made when it comes to investing in rental property is the location. 55 Queen Street, Manchester, for example, is one of our hottest property offers at the moment. It has the advantages of city centre living as well as being in a rapidly developing area with heavy investment, which means multiple employment opportunities in a range of sectors. Yet, because it has the Manchester location advantage, properties start at just above the 160,000 mark and return from rental ranges up to 2k a month for high value properties. Compared to other areas it currently represents a very attractive investment opportunity. As Manchester develops, these apartments are unlikely to lose their appeal to investors, but they may well become less available. So, they are worth considering if you are able to acquire them soon and add them to a long-term investment strategy. Other areas such as Bastion Point in the heart of Liverpool have similar potential, so there are plenty of options.
- Renting is a convenience for professionals
Since the shift to the ‘gig economy’ style of contract working, renting for the duration of a working contract is becoming the new norm. As the cost of commuting rises, we are also seeing higher demand for city centre living accommodation. Many mid – high income professional and couples are looking to enjoy all that a bustling metropolis has to offer, while still being close to the workplace. Many apartments are also spacious, well-appointed and located centrally so that hybrid working also makes them an attractive life choice.
- Renting is becoming the norm
The bottom line is that despite government schemes and incentives from several sources, buying is often not an option for many people. The cost of deposits, mortgages and the difficulties obtaining finance on any property, let alone a prestigious city apartment, are often prohibitive for many. Renting is now the first option for many and this is tending to become more common. That means a demand from the marketplace that is unlikely to change.
All of the above should also be put into the context of the remarkable reliability of property as an investment. While there are spot changes to the market it has consistently proved to be a strong, reliable, long-term investment since records began. Of course, there are no guarantees but that is true of pretty much all investments. If city centre property is not appealing to you then there are other opportunities, and you should look at all your options. If you do fall into the category of investor who is able to take advantage of city centre rental property opportunities though, it would seem prudent to look at what is available considering the above points and other factors.
While there is probably no such thing as a sure-fire investment, there are some that have proven themselves to be far more reliable than others. With such a clear track record of success and the current demand for homes, property must be considered one best options for a long-term investor. That said, it always has. So, for the potential investor looking at property there is a comfort in knowing that the more things change, the more that stay the same.
Call us and let’s talk about how we can help you find the right investment property for you.
There is no lack of property investment opportunities in the UK, so why are so many investors are looking to Manchester? The answer is simply that the North, and Manchester in particular, are fantastic options for investors compared to other UK cities.
Why is Manchester attracting property investors?
Well, let’s start with the financial advantage. The cost of property is very attractive for any potential investor. Our current property on Queen Street is a fantastic example. With the price of apartments in this location currently starting at sub £170,000, Manchester compares very favourably with other city locations. For context, the price of a comparably located apartment in London is often 3 times that of this particular property. Which means your potential investment in a single apartment in London could give you multiple investment further north. With a rise in market value of almost 10% and steady growth in the past year, a rental investment in somewhere like our Queen Street opportunity is a very attractive option for the long, and short term, investor.
The truth is though that there will always be potential opportunities available for investors. The property market is thriving, and it is awash with possibilities. So, while a few moments of research will tell you Manchester is clearly a sound financial option as an investment, so are some other opportunities. So, what is it about Manchester that makes it such a desirable place for investors?
The Manchester property rental difference.
Homes are rented for lifestyle as much as price or convenience. The key to a good rental property investment therefore is to ensure it is in an area that is currently attractive to new tenants. Just as importantly, you want it to remain attractive and even become more so over time. This is where Manchester wins over other cities. When it comes to desirability it is a textbook example of great city living.
Employment potential is always a key factor for a property location. The low cost of being located here makes it one of the most attractive business settings in the UK. Manchester is now home to regional branches, and often the head offices, of some major brands such as Siemens, KPMG, Adidas and AstraZeneca. Continued overseas investment also makes up a significant part of the Manchester business landscape. With post Brexit concerns, the cost of locating in the capital and independence ambiguity in Scotland, European businesses are naturally eyeing the opportunities presented elsewhere. With uncertain times ahead, the sensible option for business seems likely to continue to be the more cost-effective option of the north. The city is actively encouraging growth and welcoming investment.
Air travel, train and road access are all exceptional and, of course, this will only become better with the advent of HS2 which is expected to boost the economy dramatically. With its existing infrastructure and continuing development opportunities, Manchester stands out as the destination of choice for business and that means more jobs and therefore the increased demand for homes for employees who fill those positions.
The ultimate in city living
As a place to live, Manchester is alive and buzzing with everything from cultural highlights such as the Whitworth gallery and Imperial War Museum through to a night life that is second to none. The music scene is known worldwide and as it carries the legacy of musicians such as Oasis, The Hollies and The Happy Mondays it’s no wonder that the city has a reputation for producing great talent. World class restaurants abound as do small, independent eateries. Award winning vegan kebabs now ply their wares in the same marketplace as traditional fish and chip shops and the street food is something that must be experienced. Street Markets, incredible shopping, new developments and not to mention the innovation of Salford Quays, are all on your doorstep. Sport is also part of the beating pulse of the ‘football town’ with some of the biggest stars playing at the world-famous Old Trafford.
It wouldn’t be fair to miss out one very important aspect of Manchester that makes it so desirable as a location. One often quoted downside of city life, and a reason regularly cited as to why so many people are leaving London, is the lack of green spaces. As fun as city living can be, we all need to get away from it all now and again. Walking out of the Queen Street development you are literally 30 minutes by car from some spectacular countryside and just over an hour or so by public transport to incredible spaces like the Pennines and the Peak District, as well as some traditional seaside towns. It is a cosmopolitan city practically in the countryside.
Manchester is also the new city of stars. The Media City development is the home of major broadcasters and has some of the most in-demand production facilities in the UK. Located on nearby Salford docs, it is the expanding home of the BBC and ITV as well as a busy tourist, leisure, and shopping destination.
With its ongoing employment opportunities for young professionals, a greed for more talent as it grows, continued investment and a vibrant and attractive city living space minutes from spectacular countryside, Manchester has far more to offer than a good investment opportunity. It has a legitimate claim to being the beating heart of a developing new economy. It is this that will encourage the continuation of the already buoyant rental and property sales market.
At the end of the day, yes, there are other locations with opportunities for your investment, but they are not the unique combination of financial advantage and living experience that is Manchester. It is that individuality that means your investment is in the right place.
As of writing this, we seem to have dodged a recession. However, many economists are still warning of difficult times ahead. This raises all sorts of questions about investment, not the least of which is whether property is still a good option.
The ‘will there be a recession’ problem
There is a problem with predicting a recession right now because the situation we are in has never been seen before.. That said, we probably do need to accept that many of the usual drivers for a recession are already showing. Inflation is rising, the pound isn’t looking particularly strong, the base rate is up here and overseas, and so on. However, before we get all gloom and doom about things, we need to take a breath.
If you are old enough to remember previous recessions and turbulent economic times such as the crash of 2008, you will know that this one is rather different. There has never been a modern economy recovering from a pandemic, for example, so there is no precedent to apply as to what effect that will have. Other oddities like low unemployment, most major industries still being strong, the base rate is up but it’s still relatively low, and the continued investment from overseas, are also in the mix. It is going to take a brave soul to confidently predict where the economy will go next in these choppy economic waters.
Recession or not, is it a good choice to invest in property?
With everything that has happened in the last few years, and the current market, you certainly need to think carefully about your investments. However, hasn’t that always been the case? In the end, when you consider investing in something like a city centre apartment, we are talking about a significant amount of money. So, should you be careful? Well, yes, of course you should, it’s a major financial decision. There are a lot of things to consider but, when you stand back from the situation, a potential downturn in the economy is just another factor in the overall picture. It isn’t the be all and end all of your assessment.
The fact is that property has always been one of the most popular choices for investors for some very good reasons.
- Property has regularly increased in value.
- We have all witnessed the value of property dependably rising for many years now and it has done, for the most part, for nearly a century.
- Recessions, depressions and market crashes come and go.
- Very few investors looking at a rental property are doing so for quick gain, so playing the longer game is not unexpected.
- All markets are about supply and demand, and demand for property is high.
- There is no shortage of tenants looking for somewhere to live. When the demand is there, a market is always open.
- Recessions are national but local factors make a difference.
- Cities like Liverpool and Manchester are booming and that means people looking for homes.
- When you are considering investing in property you budget for possible downturns.
The chances of any investment having some ups and downs are very high. Most seasoned investors simply see a downturn as an inevitable part of life and expect that it will be a matter of riding it out.
As I mentioned at the beginning of this article, the threat of an imminent economic crisis appears to have reduced considerably. Maybe it will be back maybe it won’t, but experience says that it takes a lot to make property investment unattractive to the long-term investor. It isn’t that I am not taking that threat of recession seriously, of course I am, but to be honest the property market is about more than bubbles in the economy. There is little that has the same resilience as property value and very few things are as reliable as bricks and mortar when it comes to investing.
Perhaps the actual question of whether it is a good time to invest in property is flawed. If you are an informed and shrewd investor, as all our client are, then can there ever be a time when it is the wrong thing to invest wisely? In the middle of the great crash of 2008, the average property price was hovering around the £168,000 mark. Last year it was just over £230,000, that probably says more than anything else about the long-term value of property investments.
I mentioned Manchester and Liverpool earlier as good potential investment areas. Whatever happens with any other factors, investing in the right property, at the right time is clearly going to make your money work harder for you. Somewhere like city centre Manchester, which is developing a new economic energy, is always worth considering. In the end it will always be about being able to invest well, invest wisely and find the right location to do so.
I should end with the usual statement that this article is not intended as financial advice. It is speculative look at the possible impact on the market of a recession or near recession. It’s my opinion, not guidance. Nobody can predict the future and the world is a pretty unstable place right now. I advise, as I always do, that you go with your own judgement. If the little voice in your head is telling you property makes sense, only you can decide whether to act on it.
Call us, let’s talk about where you could invest and, of course, whether it is right for you.