The government’s Northern Powerhouse initiative, designed to boost the regional economies in the North of England and the role they play in the nation’s overall economy, has given a definite boost to the property markets of key Northern cities Manchester and Liverpool.
These cities are experiencing a rush of investment, despite Brexit leading to forecasts of a slowdown in growth. Indeed, the Northern Powerhouse initiative was seen by some as a factor likely to soften the impact of Brexit in Northern markets, leading investors who subscribed to this view to identify Northern cities as key locations for UK property investment in the coming months.
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Manchester was already a city with strong market conditions, most particularly a lot of demand for properties and a noticeably lesser supply. As part of the Northern Powerhouse the government has been courting foreign investment for the city. Strong investment links with China, in particular, have been secured and have given a significant boost to a city that was already doing well. Manchester is currently the UK’s strongest-performing property market outside of London, thanks partly to activity from Chinese and Hong Kong investors, with its 6.8% rental yields some of the highest around.
Manchester is perhaps the biggest star of the Northern Powerhouse and the current property boom, Liverpool is definitely a prominent co-star on the Northern property stage. This city is also experiencing a boom, and like Manchester it owes much of its thanks for this to the Northern Powerhouse initiative. It is rapidly rising in profile as another key destination for investors based in China and Hong Kong, as well as from many other key markets around the world.
Also like Manchester, Liverpool was already in a strong position before receiving a further boost from the government’s initiative. The city’s economy has been experiencing growth since the 1990s and in recent years the presence of multiple universities and a strong student population have particularly supported growth. Private sector rents in Liverpool were up by 11% last year, and are forecast to grow by another 22% in the years to 2020.
There was a question mark hanging over the Northern Powerhouse for a while following the EU referendum. While there was no reason for the Brexit vote directly to have much impact on the plans, the aftermath led to massive changes in national government including a new Prime Minister and the departure of the initiative’s former champion, then-chancellor George Osborne. However, the UK’s current leadership has recommitted to and continued to press ahead with these plans, which have already delivered solid results and will continue to roll out over a matter of years. Combined with the weakened pound attracting foreign investors with favourable exchange rates right now, the UK in general and the North in particular remain strong prospects for property investment.