UK Government Boosts Build to Rent

UK Government Boosts Build to Rent

A £45m cash injection has been announced by the UK Government to kick-start the construction of 2,000 build to rent homes.

As the Government clamps down on the buy to let sector, it has announced that it will be driving £45m of its £3bn Home Building Fund, in a move to create a “bigger, better private rental market”.

The deal is one of the largest for the private rental sector in the UK, and is focusing on creating thousands of homes in Leeds, Birmingham and Manchester.

Housing Minister, Gavin Barwell, is also confident that it will “create jobs and opportunities for many hundreds of people”.

Along with the £45m from the Government, funds from HSBC will also be used to back the £400m project. 995 of the purpose-built housing units will be in Manchester, which has the highest rental yields in the UK outside of London: 774 more will be built in Leeds, and 323 in Birmingham.

In the Autumn Statement, issued in November, it was also announced that letting agent fees for tenants will be scrapped. This is just part of the Government’s plan towards tighter regulations, and improved quality in rental accommodation for the £5.4m households who rent across the UK.

Built To Rent To Replace Buy To Let

These plans follow on from George Osborne’s clampdown earlier in the year, ending mortgage tax relief and raising stamp duty. Both moves were intended to curb investment into the buy to let sector, and these latest moves demonstrate a new focus on build to rent, which Knight Frank estimates will be worth £50bn by 2020.

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The private rental sector in the UK is at an all-time high, and showing no signs of slowing down. As prices on residential property continue to skyrocket, it has never been more important to invest in new housing across the country.

The building and development of properties for the rental market, is one of the key aspects of our work at The House Crowd. Along with offering a more democratised property investment market for those seeking to raise capital through property, we are also confident that our investment opportunities are doing a great job in providing high quality accommodation across the rental sector in the North West of England.

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HS2 and the Manchester 2040 Transport Strategy

HS2 and the Manchester 2040 Transport Strategy

We have already covered the ways in which the high speed HS2 rail plans will impact the towns, cities and regions along its route. If you missed this article, you can read it here. But how do the HS2 plans relate to the ambitious Manchester 2040 Transport Strategy?

The plans for HS2 link into the long term plans for the Manchester 2040 Transport Strategy, which seeks to further optimise the city for public transport. The HS2 is set to run from two stations in Manchester: Manchester Piccadilly in the city centre, and Manchester Airport. Journey times to London will be just an hour.

As well as the obvious benefits to commuters, and northern residents in general, another priority of the 2040 Transport Strategy will be the improvements to freight transport. This is an aspect that is seen as absolutely key to economic growth, providing sustainable commercial capabilities across the region.

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2040 Transport Strategy Aims To Create Idyllic Manchester

At the heart of the Manchester 2040 Transport Strategy is a move to a cleaner, greener city. Less traffic congestion, and more cycling and walking paths, for example, will reduce air pollution. Leisure and rental facilities, public parks and green spaces, and a thriving, increasingly mobile workforce, are all promised by the work going into Manchester.

Particular industries are being beckoned to the city: financial and professional services, academic research, scientific innovation, and creative and technological industries, are all being targeted as key areas of the global economy expected to generate the highest levels of economic growth.

What’s more, the city seeks to devolve powers from central government. Powers to legislate and fund the city’s transport, its housing, and its regeneration plans, are being brought under the domain of the Greater Manchester authorities. Power to the Powerhouse, as it were.

It feels like the Manchester 2040 Transport Strategy, of which HS2 (and HS3 for that matter) are a part, are being seen as central to the creation of a near-Utopian Manchester.

What Will the Manchester 2040 Transport Strategy Do For Property Prices?

Where HS2 is accompanied by regeneration plans, as well as the wider approach to community transport offered by the Manchester 2040 Transport Strategy, history demonstrates favourable results for property.

Though homeowners may be understandably concerned about the impact on property prices, examples from recent years demonstrate positive reactions. In fact, experience shows us that towns and cities along the route will outperform the rest of the UK.

One of these examples is the case of both Ebbsfleet and Ashford, two towns which have been served by high-speed rail networks since 2007. Striking figures show both towns to have demonstrated better resilience, and quicker recovery, from the recession than the UK average.

As well as demonstrating the positive effects of new stations and high-speed rail networks, and the urban regeneration which comes with them, the figures also demonstrate the positive effect that reduced journey times have on property prices. The high-speed rail network serving the towns has cut the Ebbsfleet-London commute to 19 minutes, and Ashford-London to 38 minutes.

Basically, sustained analysis of property prices correlated against high-speed rail networks highlights a trend towards increased region and town desirability in those areas served by high-speed rail.

By placing integrated transport hand-in-hand with urban regeneration plans and pumped-up industry, property markets can expect to flourish throughout the Northern Powerhouse, as well as the Midlands, and all areas right along the HS2’s route.

With increased productivity (expected to generate gains of £8bn by 2037), and reduced journey times as a result of the Manchester 2040 Transport Strategy will allow people both higher wages and more time to spend on leisure activities. Of course, this will also pump more money into the local economy.

To conclude, all of these many factors point to serious opportunity for property investors, particularly in areas in or close to Manchester. As we at The House Crowd already know, the region is absolutely ripe for the picking, and will only become all the more desirable in coming years.

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HS2 and Its Role in Powering the Northern Powerhouse

HS2 and Its Role in Powering the Northern Powerhouse

HS2 is the biggest expansion of the UK’s rail network since Queen Victoria was on the throne. The project aims to bring cities and regions closer to one another, as well as stimulate economic growth, catalyse investment, and create jobs. Combined with urban regeneration plans across the North West, and industry advancing throughout the region, HS2 promises to be one of the leading driving forces powering Manchester, as well as other midland and northern cities, such as Birmingham and Leeds.

Once all the planning and consultation has taken place, and work finally begins, the first phase of linking London and Birmingham is set for completion in 2026. This will be followed by a section running between Manchester and Birmingham, due to be completed in 2033. Clearly, it’s a long term strategy, but one that will ultimately have a significant effect on the evolution of regional economies as the plan comes to fruition.

As well as reducing travel times, another factor that promises to transform economic performance is that of reduced costs. Given the extortionate rail prices that commuters are currently subjected to, this would be a welcome development. Travel costs aside, cutting journey times will prove massively beneficial to commuters. The Leeds to Birmingham route will slash the two hour journey down to just 57 minutes, and more than halve the time from Manchester to Birmingham, from 88 to 41 minutes.

What evidence is there that these high speed rail links will really have an effect on economic growth?

Well, if you consider the Paris to Lille link, as well as the InterCity 125 network here in the UK, you’ll notice a trend within the connected towns, cities, and regions of a positive bloom in both economy, and general vibrancy.

The HS2 is also expected to increase the UK’s GDP by at least £15bn a year, as a direct result of increased rail connectivity. Productivity gains are also expected in the region of £8bn by 2037.

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Of course, what we are most interested in is how HS2 will drive property values in and around Manchester.

It’s fairly obvious that the economy is inexorably linked to the property market. With the growing economy catalysed by the new rail routes, come more businesses to move in, which, in turn, as a positive effect on population growth. Clearly, population growth drives housing demand, both in the rental and ownership sectors.

An exceptional increase in the demand for homes is expected all along the HS2 rail route. Where property prices in London have created a housing crisis that is untenable for many, the HS2 will provide a fast, simple transport route for those seeking to relocate to less unaffordable regions and commute into the capital. Not only this, but the already blossoming opportunities for careers and leisure in Manchester continue to make it an appealing option for those choked by the dismal state of London.

HS2 itself will deliver an extra 400,000 long term jobs all along its route and in surrounding areas. Even before its completion, 22,000 jobs will be created merely by its construction. These opportunities for workers will further supercharge the property market along the route – which, of course, is the key to fantastic property investment opportunities!
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Why Foreign and Domestic Investors Love Manchester

It’s no secret that the Manchester property market is the centre of attention for property investors both here and abroad. In fact, it’s all across the news. Perhaps that’s part of what’s driving this attention: more and more investors are wising up to the possibility of great ROI in the heart of the Northern Powerhouse.

Money From Abroad Fuels Manchester Property Market

There is no signs that the flood of cash flowing into the Manchester property market, nor the city’s economy at large, is likely to slow any time soon. Manchester is now the largest economic area outside London: £56bn of gross value added. Germany alone is set to spend £200m in the city before the year is out, fuelled in no small part by the drop in the value of the pound against the euro.

Nonetheless, it’s not just Brexit that’s got Germany investing in Manchester. The Amazon distribution hub, a 280,000 square foot are at Manchester City Airport, was purchased for £35m by German investors Hansainvest, for instance.

So, why Manchester? Well, there’s all the rabid regeneration that’s transforming the city in so many ways. But it’s also the state of London’s property market.

Manchester’s Winning Property Prices

Knight Frank have recently released research findings demonstrating that London’s property prices are now so stupendously high, they’re starting to hit an affordability ceiling that threatens to smother the capital’s market altogether. As such, investors are looking elsewhere, and Manchester is where they’re feasting their eyes.

It’s a city that’s experiencing the strongest house price growth of any city in the UK. It’s been voted the most liveable city in the UK by the Economist Intelligence Unit’s Global Liveability Scale. Its student population is the largest in the UK, with student accommodating offering excellent ROI.

Student Property in Manchester

Student property is one of the investments tipped to be unshaken by Brexit. Demand for purpose-built units for this demographic are in chronic undersupply, meaning any rental development of this kind will be snapped up without hesitation by student tenants. The King’s Court development on Hyde Road, for example, offers a huge 8% net income guaranteed over five years: no development risk (as it’s already developed), and immediate income up for grabs.

The Manchester Property Market Rules, OK?

We’ve covered the subject of the Manchester property market boom, and corresponding regeneration, almost weekly over the last few months. And believe us, it’s not just because of our vested interest in the city: this is simply news that’s completely dominating the property investment space.

Compounding evidence that Manchester is pretty much the best place to invest in the UK right now is everywhere, with property experts across the board extolling the virtues of the Northern Powerhouse, and its strong potential for excellent returns for those willing to place their money here.

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