As we near the end of the year, it’s time to look at what 2019 might bring for the property sector. Surrenden Invest has already highlighted the top five housing hotspots for landlords to look to next year…
With the UK set to part ways with the EU at the end of March 2019, it’s going to be an interesting year for any number of sectors, housing included.
However, Surrenden Invest, a specialist property investment agency, believes that the UK is as prepared as it can be to ensure that investing in property continues as business as usual.
The firm’s Managing Director, Jonathan Stephens, explains: “Nobody can ever see what the future holds – that’s the case regardless of Brexit. As such, looking ahead to likely investment hotspots is a case of examining the underlying market fundamentals. For 2019, that means cities with youthful populations and strong trends for city centre living. The UK’s rental sector is still growing, so 2019’s hotspots will be those areas in which populations are expanding rapidly, and where employment prospects are sound.”
As we all know, the UK is in the midst of a housing crisis, and is falling further and further behind each year in terms of delivering the number of homes that our population needs. The 13,000 new homes mentioned in last week’s Autumn Budget, for instance, is “a mere drop in the ocean”, according to Surrenden Invest.
Combined with the rapid rise in popularity of city centre living, the shortage of housing is creating pockets of extreme demand in some of the country’s regional metropolises.
As such, the Surrenden Invest team has done some number-crunching (with a little help from data from the Office for National Statistics and Zoopla), to see which housing hotspots are worth keeping an eye on next year:
2018 population: 1,147,300
2041 projected population: 1,313,300
House price growth over past five years: +29.46%
With a 14.5% population increase on the cards between now and 2041, Birmingham tops the list of 2019 housing hotspots. The city has a youthful population compared to the UK as a whole, with its five university campuses attracting young people with a thirst for knowledge. It also has the sixth highest graduate retention rate of any UK city, and the third largest inflow of graduates with no prior connection to the city.
This 65,000-strong student talent pool provides Birmingham with a vast pipeline of future workers and entrepreneurs. It also means that stylish homes in city centre locations are, and will continue to be, in high demand.
2018 population: 553,500
The Top 5 Housing Hotspots for 2019, as Predicted by Surrenden Invest
2041 projected population: 631,500
House price growth over past five years: +30.60%
Manchester is on track to experience a 14.1% population rise between 2018-41, meaning that it will be snapping at Birmingham’s heels in terms of growth. The city has already risen up the ranks in recent years, making it onto IBM’s list of the top ten global destinations for foreign direct investment in 2017 (as part of the Manchester-Liverpool metropolitan region).
Manchester benefits from a steady influx of bright, enthusiastic young people. It is second only to London in terms of its graduate returners (at 58%), was well as its inflow of graduates with no prior connection to the city. Businesses are doing much to harness this talent; Amazon chose Manchester as the site of its first Amazon Academy, running a series of programmes and events designed to help hundreds of small, local businesses. Future residential developments in the city centre will need to serve these entrepreneurial young professionals.
2018 population: 8,965,600
2041 projected population: 10,346,000
House price growth over past five years: +32.36%
London leads the UK in many respects, as a world-renowned centre for finance, business, education, tourism and more. Over the next 25 years or so, its population is expected to rise by 15.4%, driving demand for housing across the capital. From sleek, centrally located apartments to sprawling houses in the suburbs, London offers every kind of property imaginable, providing homes for workers from across the UK and the globe.
More than 300 languages are currently spoken in London’s schools, highlighting the diversity of the capital’s future workforce. The region attracts some of the best and brightest as a result of its vast range of employment opportunities, and is home to a huge rental population. According to PwC, 60% of Londoners will rent a home by 2025, as the city’s young (and not so young) professionals rent in ever-greater numbers.
2018 population: 495,300
2041 projected population: 554,500
House price growth over past five years: +24.67%
Liverpool is on track to experience a population increase of 12.0% between now and 2041, as the city continues to attract talented young people as a result of its thriving service and healthcare sectors, and knowledge economy. The city’s extensive cultural offering is also a draw, from its plentiful museums and art galleries, to its excellent restaurants and lively music scene.
42% of Liverpool’s population is below the age of 30, compared with 37% nationally. This youthful scene is driving forward the city’s reputation as an innovative, entrepreneurial city. It is also one of the main forces behind the extensive regeneration that Liverpool is experiencing, while the growing trend for city centre living is creating new hotspots close to key attractions and amenities.
- Newcastle upon Tyne
2018 population: 297,400
2041 projected population: 318,100
House price growth over past five years: +23.70%
Newcastle’s city centre population has grown rapidly since the turn of the century. According to Centre for Cities, Newcastle city centre enjoyed population growth of 112% between 2002-15. This massive jump in demand for city centre living is creating a hotbed of innovation within the housing sector, as developments seek to woo the bright youngsters who have flocked to the city for work and want prime accommodation in the heart of Newcastle.
With a superb social scene and a thriving urban renaissance well underway, Newcastle’s attractiveness to ambitious young professionals is obvious. It also has a rapidly growing student body as a result of its fantastic universities. Student numbers at Newcastle University have shot up by over 70% since 2000, while Northumbria University has enjoyed an increase in excess of 114% over the same period. With almost 50,000 students in total, a full sixth of the city’s population is engaged in study, creating a uniquely youthful atmosphere, as Newcastle grows its own talent for the future.
Stephens comments on the housing hotspots: “Each of these cities has its own distinctive culture, which is drawing in young people, who will ultimately contribute to the future success of that city. Those working in the housing sector need to respond accordingly, delivering high quality homes in central areas, in order to meet the demand that these young people are driving.”