Chinese interest in Manchester property is only set to increase, according to agents, as investor appetite for the regional city remains strong.
The city is at the heart of the UK’s “Northern Powerhouse”, with positive employment figures and an active economy expected to support property prices in future years, as well as draw people to the area, fuelling further demand for housing. Those conditions, combined with the weak pound in the wake of the UK’s Brexit vote, have already attracted the attention of Chinese buyers.
Indeed, the government is hoping to attract £5bn of foreign investment for 13 major development projects with the Northern Powerhouse, with specific interest in those investors from China. These projects include but are not exclusively residential developments; however, overseas interest in property located in the North of England has increased significantly throughout the course of this year.
Chancellor Philip Hammond has made no secret of the fact that “our trade relationship with China is now more important than ever”.
Meanwhile, according to Chinese diplomat Sun Dali, Chinese investors’ love affair with the Northern Powerhouse, Manchester in particular, began when President Xi Jinping visited the UK’s second city last year.
Jonathan Stephens, Managing Director of leading property consultancy Surrenden Invest, has certainly noticed a rise in Chinese buyers directing their investment toward Manchester. He explains: “Interest for the local property market has increased from Chines buyers as Manchester’s credentials as an investment hotspot continue to increase, not only leading the Northern Powerhouse but also challenging London as the buy-to-let capital of the UK.”
“Accessibility is crucial for overseas investors and with Manchester’s regional airport now welcoming regular direct flights from China, investment to the city is subsequently thriving,” he adds. “We have already witnessed this improved connectivity impact the Manchester housing market, with Chinese buyers able to fly in regularly, sometimes for less than 24 hours, to inspect and purchase property in the city centre.”
Positive outlook for Manchester house prices
10th November 2016
Manchester has a positive outlook for house prices over the coming years, as the UK’s Brexit vote is forecast to put the brakes on property values.
New research from Savills says that the decision to leave the European Union has “created uncertainty” and “forced the market to change gear” across the UK, with growth to slow in the coming years.
“Although we are expecting economic growth to remain positive, households will face weaker income growth and there may be some job losses over the next two years,” says Savills’ research. “The period of negotiation with the EU is likely to be a rollercoaster of confidence, with volatile sentiment indicators and lower levels of business investment. As importantly, the amount buyers are borrowing relative to their incomes is already stretched in some parts of the market. In particular, it is bumping up against the limits of mortgage regulation in London.”
Brexit negotiations are expected to be concluded by 2019, presuming that Article 50 is triggered in March 2017, which will bring back buyer confidence and a small rebound in in house prices, as well as place pressure on interest rates. When rates do rise, the impact is predicted to be most acute in London, where competition for housing is higher and is pushing buyers, who are currently dependent on low interest rates, outside of their borrowing comfort zones.
“The impact of higher mortgage rates is likely to be much less acute in the more affordable markets of the Midlands, Wales and the North of England. These areas have more capacity for house price growth, but most lack the economic catalyst needed to unlock this potential,” says Savills.
“Economically active markets such as Manchester are expected to outperform their regions,” forecasts the report.
Indeed, Manchester is one of the UK’s brightest spots for house price growth at presents. On a city-wide basis, Hometrack data shows that London price growth has slowed to its lowest level of quarterly growth in 20 months. 11 cities are now registering higher rates of capital growth than in January 2016, with Manchester among them, joined by regional cities Liverpool, Cardiff and Birmingham.
Regional cities overtake London house price growth
22nd July 2016
Regional cities in the UK have overtaken London for house price growth, according to the latest official UK House Price Index.
The data from May shows that property prices rose 8.1 per cent year-on-year to an average of £211,230. Monthly house prices rose by 1.1 per cent.
In England, prices rose 8.9 per cent annually to an average of £226,807, ahead of Wales (3.6 per cent to £142,568).
London experienced the greatest increase in its average property value over the last 12 months with a movement of 13.6 per cent to an average of £472,163, but on a monthly basis, the capital was outpaced by other cities: the North East experienced the greatest monthly growth with an increase of 2.1 per cent.
The figures follow the highlighting of regional cities such as Manchester, Liverpool and Newcastle as markets worth considering for investors, particularly with the weak pound in the wake of the UK’s Brexit vote.
London top dog again as UK house prices climb
14th June 2016
London is top dog again, according the UK’s new official house price index. The report, which replaces the indices previously issued by the Land Registry and Office for National Statistics, has a different way of calculating values, taking into account cash sales and new dwellings.
This new methodology appears to have recalculated the average London house price as £470,025, compared to the £534,785 recorded by the old Land Registry index in March 2016. Nonetheless, the data shows an annual price increase of 14.5 per cent in the capital, with monthly prices rising 0.6 per cent since March, according to the new, more accurate data.
Overall, the statistics show annual price increase of 8.2 per cent in the UK, which takes the average property value in the UK to £209,054. Monthly house prices rose by 0.6 per cent.
England led the way with a rise of 9.1 per cent year-on-year, taking the average property value to £224,731. Monthly house prices rose by 0.7 per cent. Wales shows an annual price increase of 1.7 per cent, which takes the average property value to £139,385. (Monthly house prices, on the other hand, fell by 1.9 per cent.)
In spire of the reassessed values, the figures see London become top dog once again in the housing market. The North West experienced the greatest monthly growth with an increase of 2.3 per cent, but London’s annual jump of 14.5 per cent was unrivalled, with the North East seeing the lowest annual price growth (up 0.1 per cent).
David Brown, CEO of Marsh & Parsons, comments: “This new, combined house price index gives a more accurate picture than ever before given the inclusion of cash sales and new dwellings, along with average price calculations that are less liable to volatility. The revised methodology doesn’t scramble the signal, however – house price growth continues the strong performance it has shown over the past two and a half years, despite a slight calming since March.
“The rate of house price growth in the capital has been overshadowed at various junctures over the past year by strong showings from the East of England and the South East, but London is top dog once again. A truly world-class destination like London may not always be at full throttle, but it never loses its lustre.”
UK house price inflation hits 9pc
17th May 2016
House price inflation in the UK hit 9 per cent in March 2016 compared to a year ago, as buyer demand raced ahead of the stamp duty surcharge deadline.
England led the way, with prices up 10.1 per cent, followed by Northern Ireland (6.4 per cent) and Wales (2.1 per cent), while prices dipped 6.1 per cent in Scotland.
The price growth was fuelled by the pre-stamp duty deadline surge in activity, with the Council of Mortgage Lenders also reporting £13.8bn was lent during the month, 59 per cent more than in February 2016 – the highest figure for any month since 2007.
England’s house price growth was driven by London (an annual rise of 13 per cent), the South East (12.2 per cent) and the East of England (12.1 per cent), as the country continues to experience a two-speed market, with buyers venturing out from the capital to surrounding areas.
“Undeterred by rising house prices in the East and South East, buyers are increasingly exploring greener, leafier alternatives to the streets of the capital. The growing popularity of these areas as commuter havens is bringing a new energy into the local property markets, and driving demand,” comments Richard Sexton, director of chartered surveyor e.surv.
Excluding London and the South East, UK house prices increased by 5.9 per cent in the 12 months to March 2016.
Regional revolution hits UK, as East overtakes London house price growth
13th April 2016
A regional revolution is happening in the UK’s housing markets, as the East and South East have overtaken London’s house price growth.
UK house prices grew 7.6 per cent in the year to February 2016, according to the latest figures from the Office for National Statistics, down slightly from the 7.9 per cent annual growth recorded in January.
England led house price growth values up 8.2 per cent, ahead of Wales (2.8 per cent), Northern Ireland (2.4 per cent) and Scotland (down 0.8 per cent). While London has previously driven price growth, though, the UK capital is no longer top dog in the price rise rankings: the South East and the East both saw double-digit increases of 11.4 per cent and 10.3 per cent respectively, quicker than London’s 9.7 per cent.
Excluding London and the South East, UK house prices increased by 5 per cent in the 12 months to February 2016, with the overall UK house price sitting at an average £284,000.
“House prices in the East and South East have been hanging on the capital’s coattails for a long time, but not anymore,” says Richard Sexton, director of chartered surveyor e.surv.
“The South East’s commuter credentials are resulting in higher annual house price growth than in London. People struggling to purchase property in the capital are hunting elsewhere and the South East is the obvious choice – creating a surge in demand.”
“Across the UK however, the usual suspects are holding back homeownership dreams,” he adds. “A supply shortage is leading to price hikes – which many buyers simply can’t meet. This shouldn’t be the case. Savings have seen a boost from low inflation and rising wages. But unfortunately, housing market prices are generally still moving faster.”
The trend is backed up by new data from Home.co.uk, which shows that all regions except Greater London showed house price growth in March.
“Rising Typical Time on Market figures in the East of England, the South East and Greater London are contrary to seasonal expectations, and this is a clear indicator that the anticipated slowdown is taking hold as demand dips, at least for the time being, while the market pauses for breath,” says the report. “In Greater London, the combination of high prices, rising supply and reduced demand region looks set to keep prices in check over the coming months.”
Total stock remains “very low”, with scarcity remaining the key market driver. Overall the number of properties entering the market is down 6 per cent year-on-year, with the severest shortage felt in the West Midlands and South West, where price growth is expected to continue in the summer months.
UK house price growth hits 10-month high
23rd March 2016
UK house price growth has reached a 10-month high, according to new figures from the Office for National Statistics.
Property values rose 7.9 per cent in January 2016 year-on-year, faster than the 6.7 per cent annual growth recorded in December 2015 and the highest rate of increase since March 2015.
England led the way, with annual inflation of 8.6 per cent, followed by Northern Ireland (0.8 per cen), Scotland (0.1 per cent) and Wales (-0.3 per cent). The South East and London continue to fuel growth, with price rises of 11.7 per cent and 10.8 per cent respectively, but the East is not too far behind, with prices up 9.8 per cent in the last year.
Excluding London and the South East, UK house prices increased by 5.1 per cent in the 12 months to January 2016.
On a monthly basis, prices edged up 0.9 per cent, proving a marked turnaround from the 0.3 per cent decline recorded in the same period a year earlier. The average price is now £292,000, although London prices have now accelerated to a record high of £551,000.
Peter Rollings, CEO of Marsh & Parsons, says the figures set “quite a PB for the spring months to follow”.
“Let’s hope the pace hasn’t peaked too early,” he adds. “From next Friday, second homeowners and buy-to-let investors will be liable to pay an additional 3 per cent stamp duty, and this may take some of the muscle out of the market momentarily. Those who’ve planned ahead will have tried to complete those purchases before the deadline, but after 1st April this sense of urgency will ease.”
Update: September 2016 – David Brown has now replaced Peter Rollings as CEO of Marsh & Parsons.
UK house prices continue three-year climb
18th March 2016
UK house prices continued their three-year climb in March, according to UK households.
One in four homeowners surveyed by the latest Knight Frank and Markit Economics report said that the value of their home had risen over the last month, while 4 per cent said prices had fallen.
This is the 36th consecutive month that the reading has been above 50, although the regional variations continue to be evident. Indeed, positive sentiment about future house prices is driven by households in southern England, led by those in the South East, the East of England and London, with those in the North East and Scotland less optimistic.
Gráinne Gilmore, head of UK residential research at Knight Frank, says: “The fundamentals for the UK housing market remain steady, especially around mortgage costs which remain at record lows.
“The imbalance between demand and supply of housing is also underpinning house prices. The delivery of new homes remains some 30-40 per cent below the levels needed to start to address the annual shortfall of housing in the UK.
“There have already been several large targeted government policies to try and boost development and ease the path of first-time buyers – and it is notable the future sentiment reading for 25-34 year olds is the highest it has been for 15 months.
“As reflected in the index, the sound fundamentals of the market will combine to support overall prices in the coming year, but as the index also reveals, the market will continue to be ‘multi-speed’ across regions and price bands.”
UK house price growth continues, as north-south divide widens
3rd March 2016
UK house prices continue to climb, according to new figures, but the north-south divide also continues to widen.
Price growth remained steady in February 2016, according to Nationwide’s latest house price index, with values edging up 0.3 per cent month-on-month to an average of £196,930 – 4.8 per cent higher than a year ago.
“Annual house price growth has remained in a fairly narrow range between 3 per cent and 5 per cent since the summer of 2015,” comments Robert Gardner, Nationwide’s Chief Economist. “This trend was also maintained in February, with house prices up 4.8 per cent over the year, a slight pickup from the 4.4 per cent increase recorded in January.”
The other trend that continues, though, is the regional imbalance in the country’s housing market. The latest House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics found that households across the UK believed that house prices had grown in the last month, but that the strongest perceived rate of growth was in London, followed by households in the East of England.
“February’s survey highlights a continuation of the steady upward trend in UK house price sentiment from the pre-election lows seen in early 2015,” comments Tim Moore, a senior economist at Markit. “While pay growth has been sluggish and the economic outlook weakened in recent months, a resultant expectation that interest rates will stay low for longer seems to have boosted UK house price perceptions at the start of 2016.”
Indeed, fewer than half of UK households (46 per cent) now expect a Bank of England rate rise over the next 12 months, down sharply from 71 per cent in January and the lowest proportion since October 2013.
There remains a clear north-south divide in terms of the outlook for house prices too, with households in Southern England more confident about future growth over the coming 12 months.
Gráinne Gilmore, head of UK residential research at the agency comments: “The average annual spread of future HPSI readings – the difference between the lowest and highest readings across the regions – reached a new high this month, with households in the South of England expecting stronger growth than those in the North.”
“The regionalised nature of the market is unlikely to unwind in the short term,” she adds.Google+