Manchester was revealed as one of the most popular UK cities for property investment among buyers in UAE, Saudi Arabia and the wider Gulf Cooperation Council (GCC) region, according to research by Select Property Group.
The property developer found that of the 367 investors surveyed, almost 80% agreed that the UK was a strong place to invest in property, with 13% highlighting Manchester as the most appealing location, second only to London.
Increasing interest from overseas investors follows a sharp rise in property prices in Manchester, where values increased by over 7% in the 12 months to June 2018, with prices expected to continue increasing faster than the UK average over the next few years.
Adam Price, managing director at Select Property Group, commented: “The heightened popularity of Manchester within the property market is a trend that’s been earnestly followed by shrewd investors – not just those from the UK, but by those overseas too, and our new research corroborates this.”
In fact, over a third of investors revealed that they choose UK cities based on where capital growth is strongest, with 70% agreeing that rental yields in northern cities are greater than London.
“It’s becoming clear that London, which was once hailed as the best UK city to invest in, can’t offer the levels of growth it once did,” Price continued. “Prices are reaching an affordability ceiling and, coupled with slow yield growth, it makes for an increasingly difficult investment to justify.”
He said that with its low supply and strong growth forecasts, Manchester presents a huge opportunity for investors to enter the market during the city’s period of economic growth.
The study suggests that the increased interest in Manchester property could be due to the effect of economic and political events, with over 70% of GCC investors believing that Brexit has made UK property more affordable.
Price added: “The uncertainty surrounding Brexit has subsequently caused a fall in value of the pound, meaning UK property is now as much as 12% cheaper to new investors. However, once Brexit negotiations with the EU conclude, uncertainty is lifted and Britain’s economy begins to stabilise, those that invest now will see the strongest capital gains and ROI in the coming years.”