Why HNWIs are looking to the North for hands off Investments

Historically, much of the property investment by High Net Worth Individuals has centred round London and the South-East of England. It is fair to say these two regional economies have been the most prosperous in recent times. However, the situation seems to be changing and there is now a greater focus on the North of England with investment in Manchester as well as Derby, Leeds, Liverpool and Birmingham on an upward trend.

Why is the North of England prospering?

The North of England has received significant focus over the last few years with the government promising to create a new economic base from which the region can benefit. It is fair to say that so far there has been little in the way of real assistance from the government but focus is starting to turn away from London and the South East of England. There are a number of reasons why property in the North of England is more popular today which include:-

• Decentralisation of Public Services

Over the last couple of years we have seen a number of public services (and private companies) reducing their exposure to London and spreading employment across other areas of the country. As well as HMRC opening offices in Leeds and Birmingham we also have the likes of Channel 4 relocating there head office to Leeds. As the cost of property and employment is markedly lower in the North of England, compared to central London, this phased decentralisation is likely to continue.

• Student Accommodation

It is fair to say that back in the mid-1980s the standard of student accommodation across the UK was poor to say the least. Since then, there has been a significant shift in investment strategies and the student accommodation available today bears no resemblance to those from the 1980s. Purpose-built student accommodation with communal areas, including gyms and other leisure facilities, is proving to be extremely popular. As a consequence, new student accommodation developments are in demand and attracting high rental yields.

• Inward Redevelopment

Cities such as Manchester, Liverpool, Leeds, Birmingham and other areas of the North of England have seen billions of pounds invested in redevelopment. While many developments are managed by private entities there is a growing amount of public/private co-operation in this area. This inward redevelopment has given many local economies a boost thereby attracting more businesses, retaining students after they graduate and increasing demand for private rental property.

• Changing Trends

In the past, the London and South East property markets have offered an attractive mix of capital growth and rental yields. In light of ongoing Brexit concerns, and the growing decentralisation of both public and non-public services, many investors are now looking towards the North of England, with investment in Manchester growing. Traditionally offering relatively high rental yields to offset limited capital growth, this is no longer the case in some of the more prominent regions such as Manchester, Liverpool, Birmingham, Leeds, etc.

The UK government also committed £420 million of investment into the construction sector back in 2018 with the intention of bringing the industry into the modern era. This type of commitment has been well received by the industry with Gavin Barry, chief executive at Prosperity Capital Partners, embracing the need for change:-

A key obstacle to getting Britain building the number of homes we need is the way we deliver them. While other industries have seen huge disruption and innovation over the past few decades, house-building techniques have barely changed over the past century. As a result, construction remains hugely inefficient, requiring a lot of resource and manpower.

Exclusive investments for High Net Worth Individuals

High net worth individuals (HNWI) have always played a prominent role in the UK property market. This has not changed with the switch of funds away from London and the South-East towards the North of England. Companies such as Prosperity Capital offer an array of Exclusive Property Investment Opportunities for HNWIs with a particular focus on the North of England.

If you require further information on any of the Prosperity Capital Investment Opportunities, there are further details on the company website as well as contact information.

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