Despite the fact that the vast majority of property investment in the UK is occurring in and around London, a major hedge fund has announced plans to snap up cheap properties in the North of England. This has certainly given property investors in the UK something to think about, as there has always been a significant gap between the value of property in the North of England and the value of property in the South.
The hedge fund in question is Toscafund which has significant backers and some of the best investment minds in the UK. So, what is attracting a large hedge fund to the North of England? Is it time to look outside of London and the South of England?
Spreading the joy
There is no doubt that the UK property sector is very much in demand at the moment, property prices are moving ahead and even the most pessimistic of experts believe there is potential for further growth in the short to medium term. One major concern is the fact that property investment in the UK is primarily centred in and around London at this moment in time and there has been little in the way of benefit in terms of pounds, shillings and pence for properties in the North of England.
Quote from PropertyForum.com : “Whether or not we see a change in UK government at the 2015 election there is already debate as to whether a change in government would impact the UK property sector.”
If, as many do expect, the UK economy continues to recover then eventually investors will start looking outside of London and perhaps the North of England could become something of a magnet?
For many years the North of England has been seen as something of an economic disaster area with mines, shipbuilding, textiles and other prominent industries of years gone by falling by the wayside. However, the North of England we see today is very different and includes an array of financial services, new technologies, car manufacturing and recently Nissan announced plans to make an array of electric vehicles at its Sunderland plant.
It would be misleading to suggest that the economic growth seen in the North of England over the last few years has been spread evenly but it would also be wrong to suggest there has been no improvement.
One aspect which many people seem to forget is the fact that the affordability of houses in the South of England has deteriorated dramatically over the last decade or so. There is every chance that houses will move further and further out of the reach of first-time buyers which could see a number of investors looking to cheaper areas of the country, such as the North of England.
The Toscafund for one believes that the likes of Manchester, Leeds, Liverpool and Sheffield, all major cities in the UK, will play a prominent role in the ongoing recovery of the UK as a whole. If this is the case, and there is no reason to suggest it will not happen, it goes without saying that these areas will become more lucrative in terms of property investment and household incomes should recover and begin to move ahead. This will not happen overnight, it could be a long-term situation but there is reason to believe that property investment will eventually start to leave London and the South of England for pastures new.