A report recently published by Savills revealed Manchester as the leading city for residential property investment.
The Savills report Spotlight Rental Britain provided an overview of the rental market across all of the UK.
It predicted that the market will keep growing by more than 1 million households over the next five years. According to the survey this will happen despite all measures taken by the Government to turn generation rent into generation buy.
It also stated that the existing mismatch between supply and demand will continue to support the growth of rental demand. In 2015 investment deals of a total of £2.6bn were recorded across Britain.
The review furthermore explained that investors are getting more confident in regional cities and are now looking beyond London. As special investment highlights Savills mentioned Manchester in first place, followed by Reading, Edinburgh and Bristol.
As the main reasons the report names the requirement for a sizeable deposit and stricter lending criteria, which lead to a continuing rise in demand for rental housing. According to the the Government’s English Housing Survey, the rental market has been increasing by an overwhelming 17,500 households on average every month in the 10 years to 2014.
The report also explained the criteria it used to allocate Manchester as the city with the highest residential property investment potential:
– economic projects: analysis of historic and future employment growth and major growth sectors
– investment potential: net income return, rental growth prospects and capital value growth
– relative levels of housing supply and demand: need for housing, household projections, population growth forecast and dwelling completions
– evolution and growth of rental market: growth of household renting privately
As an outlook into the future Savills’ report points out the significant growth of 7% in Manchester’s rents in the last year, almost double the national average of 3.8%. And it expects those rises to continue across all of Britain.
Finally, the report expects to see the traditional rental demographic of sharers and young professionals continue to grow across the country but especially in bigger conurbations.
Source: IA Property