Changes in the UK economy are an inevitable, but quite logical, process. The results of Brexit can only be predicted, but some changes can be already traced. New tendencies of admirers of the British real estate very well illustrate interaction of economic mechanisms of this country with an external world.
New fans of the northern cities of Britain
Chinese investors have long been fans of London real estate and have been actively working in this market for many years. Nevertheless, it seems that they have a sharp change in interest in British property. The northern cities of Great Britain began to attract their attention more and more.
Unfortunately, it is with the processes of weakening the pound, after the results of Brexit, that there is a growing interest in the UK from foreign investors. Especially from China. While London still remains a popular place for investment, in the cities of the northern part there is a surge in investment activity. The Chinese website on foreign real estate reported that requests for investment in real estate in Manchester and Liverpool increased by 255.6% and 160% respectively in January 2018 compared to the previous year. During the same period of time, requests for London real estate fell by almost 50%.
WHY THE CHANGE OF INTEREST HAPPENED?
With the introduction of the Northern Powerhouse initiative, the northern cities are now beginning to feel the benefits of being part of this project. With large financial investments in various elements of the urban infrastructure, they become very desirable places to stay. Although, in recent years, London has been a very popular destination for Chinese investors, such changes in northern cities more attract their interest now. This is strengthened by the revitalization of the economy that began as a result of the Northern Powerhouse.
In addition, the investment in the northern cities of the UK and their real estate are becoming increasingly attractive to Chinese investors. Especially in comparison with London. The average value of the property in Manchester is £190,000. Therefore, compared to the average amount in other regions, which is £223,000, the property of northern cities puts investors in a very favorable position. This difference allows to get much more for the same amount. Investment targets are the main reason that Chinese investors buy property in the UK. Therefore, lower purchase prices, high rental yield and a higher probability of capital growth make these investment opportunities very attractive.
INVESTMENT OF CHINESE INVESTORS
This is the picture that reflects the interest of Chinese investors in the northern cities of Great Britain. Now they not only buy real estate, but also start participating in the development of new projects. In particular, in Manchester, more and more joint projects, which are funded by Chinese investors. These businessmen invest a lot of effort, time and money in real estate. They are particularly attracted by the northern region, since they have direct access through the airport of Manchester. According to experts, this trend is expected to continue in the foreseeable future. In addition, it is expected that the Chinese community in Manchester and Liverpool will also grow actively in the coming years. And accordingly, investment in property in these regions.
HOW CAN IT HELP?
What conclusions can be drawn from this information? Immediately the simple rule arises: "Where there is money of some people, there is a place for the work for other people." The change in the geography of investment will necessarily lead to a change in the distribution of labor resources.