Where will the property investment hot spots be in 2019?

November 5, 2018 / Isla MacFarlane
Where will the property investment hot spots be in 2019?

Regional cities boasting Brexit-proof potential will top property investors’ lists in 2019, according to Surrenden Invest.

With the UK set to part ways with the EU at the end of March, it’s going to be an interesting year. Specialist property investment agency Surrenden Invest believes that the UK is as prepared as it can be to ensure that property investment continues as business as usual.

“Nobody can ever see what the future holds – that’s the case regardless of Brexit,” said Jonathan Stephens, MD, Surrenden Invest. “As such, looking ahead to likely investment hotspots is a case of examining the underlying market fundamentals. For 2019, that means cities with youthful populations and strong trends for city centre living. The UK’s rental sector is still growing, so 2019’s hotspots will be those areas in which populations are expanding rapidly, and where employment prospects are sound.”

The UK is in the midst of a housing crisis and is falling further and further behind each year in terms of delivering the number of homes that our population needs. The 13,000 new homes mentioned in this week’s Budget are a mere drop in the ocean.

Combined with the rapid rise in popularity of city centre living, the shortage of housing is creating pockets of extreme demand in some of the UK’s regional metropolises. As such, the Surrenden Invest team has done some number crunching (with a little help from data from the Office for National Statistics and Zoopla) to see which hotspots are worth keeping a close eye on over the year ahead.

2019 property investment hotspots:

Birmingham

2018 population: 1,147,300

2041 projected population: 1,313,300

Property price growth over past five years: 29.46%

With a 14.5% population increase on the cards between now and 2041, Birmingham tops the list of 2019 hotspots. The city has a young population compared to the country as a whole, with its five university campuses attracting young people with a thirst for knowledge. The city has the sixth highest graduate retention rate of any UK city, and the third largest inflow of graduates with no prior connection to the city.

This 65,000-strong student talent pool provides Birmingham with a vast pipeline of future workers and entrepreneurs. It also means that stylish homes in city centre locations are, and will continue to be, in hot demand.

Manchester

2018 population: 553,500

2041 projected population: 631,500

Property price growth over past five years: 30.60%

Manchester is on track to experience a 14.1% population increase between 2018 and 2041, meaning it will be snapping at Birmingham’s heels in terms of growth. The city has already risen up the ranks in recent years, making it onto IBM’s list of top ten global destinations for foreign direct investment in 2017 (as part of the Manchester-Liverpool metropolitan region).

Manchester benefits from a steady influx of bright, enthusiastic young people. The city is second only to London in terms of its graduate returners (at 58%), as well as its inflow of graduates with no prior connection to the city. Businesses are doing much to harness this talent; Amazon, for example, chose Manchester as the site of its first Amazon Academy, running a series of programmes and events designed to help hundreds of small, local businesses. Future residential developments in the city centre will need to serve these entrepreneurial young professionals.

London

2018 population: 8,965,600

2041 projected population: 10,346,000

Property price growth over past five years: 32.36%

London leads the UK in many respects, as a world-renowned centre for finance, business, education, tourism and more. Over the next 25 years or so, its population is projected to increase by 15.4%, driving demand for housing across the capital. From sleek, centrally located apartments to sprawling houses in the suburbs, London offers every kind of property imaginable, providing homes for workers from across the UK and the globe.

More than 300 languages are currently spoken in London’s schools, highlighting the diversity of the capital’s future workforce. The city attracts some of the best and brightest as a result of its vast range of employment opportunities and is home to a huge rental population. According to PWC, 60% of Londoners will rent their homes by 2025, as the city’s young (and not so young) professionals rent in ever greater numbers.

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