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Property Investment Manchester – Overseas Buyers

A photo of Manchester City

The rise of property investment – Manchester and its increasing appeal

Realty provide maintenance and management services for many developments and apartment blocks in the city – and according to specialist Chinese website Juwai, when it comes to property investment, Manchester is rapidly rising in the popularity ranks with our East Asian friends.

When you think of foreign investment in UK property, London is the hotbed of deals that tends to spring to mind. But recent figures indicate that while the capital is still a big attraction, northern cities are quickly gaining traction in the industry.

With the value of the Great British Pound being hit hard since the Leave campaign won the EU referendum, foreign investors are well aware that they can get more property for their money if they shop overseas.

The marked difference in property prices in growing cities such as Manchester and Liverpool compared to London, combined with higher rental yields and stronger capital appreciation, has led to a sharp increase in investment interest in these areas from buyers in China.

Buying up apartments in larger developments can be a great way to create additional revenue streams, especially when leases include maintenance of the building and communal areas – one less thing to manage, especially if you’re thousands of miles away.

Are investors losing their love of London?

Well, not quite. Investors are still buying in London, and often, new properties there are sold predominately overseas, but overall, enquiries from Chinese investors in the period between January 2017 and January 2018 show a decrease of 48.5%. That said, for Asian buyers with deeper pockets, London is still at the top spot.

For the same time period though, enquiries generating from China in regard to property investment in Manchester grew by a massive 255.6%, with Liverpool also seeing a significant increase of 160%.

The London trend for opening up offers to foreign investors first is also starting to spread to the North West, with many developers targeting this as their primary market for new builds.

Investment in buy-to-lets in Manchester

While over half of Chinese investors buy with a view to living in their new property in the capital city; in Manchester, buy-to-let is the intent for some 81.1% of them – and as one of the fastest growing cities on the continent (according to Deloitte), it’s no surprise.

In addition to a £70b transport investment proposal – which if successful, will be a real boon to the city – buy-to-let investments in Manchester also benefit from the vast student population too.

With this higher level of investment from overseas buyers, apartment blocks and other new builds are at risk of getting snapped up quickly, as developers look to the most active markets for faster sales.

While this may make more new developments open to renters, it also means that those struggling to get their first foot on the housing ladder may face even greater challenges through a lack of affordable property and the fact that they will be up against more affluent parties.

Keeping up appearances

Of course for these buy-to-let investments to prove profitable, investors need to be confident that the general maintenance of blocks and developments is to a good standard – the first impression people will have when viewing a rental property is the exterior of the building, entranceways, lifts and corridors.

As specialists in apartment block management, we have seen ever increasing management input over the years to prevent these communal areas from becoming a liability. Often, developers include clauses to stop investors using their properties for short term lets – and with the rising popularity of Air B&B, renting via these kinds of services are also now generally prohibited, even if the local authority permits such short lets within its jurisdiction.

While investors may feel that this limits their opportunities, having longer term renters gives them more security, while also reducing the potential for increased service charges to cover maintenance costs from higher levels of wear and tear, or complaints from unhappy neighbours.  Ultimately this results in higher capital appreciation and better place-making where large buildings contain homes as opposed to hotel rooms.