INVESTMENT GUIDE / 2021
UK INVESTMENT GUIDE | 3
Encouragingly, demand for homes to buy has jumped since the extension of the stamp duty holiday and other measures were announced in the recent Budget, and with supply continuing to fall, new research suggests that prices are set to keep rising.
The Brexit trade agreement, seven days before its deadline, proved an undoubted relief for many within the UK’s investment market. Following four and a half years of uncertainty, property experts and investors continue to monitor the UK closely, as British assets work hard to catch up with overseas markets.
With the unrivalled national mass roll out of a Covid-19 vaccine, this positive fight back from the pandemic has provided investors with the comfort they required to continue
on investing in UK property despite the country’s economic challenges. These investors will no doubt carry on reaping the benefits from what has proved to be a fairly robust and stable UK property market with an average of 4.7% growth in property prices over the duration of 2020.
Throughout the pandemic, Salboy has continued with construction across all of its sites and has supply ready to meet the ever growing demand. Its portfolio provides a range of first-class accommodation opportunities in the North West including Manchester and Salford and can provide investors with a product, set to deliver significant gains in rental yield and capital appreciation.
Following the one year anniversary of the Prime Minister’s public announcement to enforce a full national lock down, we reflect on the recent events, which have contributed to the UK property market’s stability despite the pandemic.
2021 COULDN’T BE MORE WELCOMED
4
@iamjsullivan
SPRING ‘21 QUARTER SHOWING SIGNS OF BEING ONE OF THE STRONGEST YET
HIGHER DEMAND IN THE HOUSING MARKET SINCE PRE-LOCKDOWN Rightmove
Rightmove data shows there is a surging level of demand in the UK housing market, making for one of the strongest starts to the spring season. What does this mean for buyers and sellers?
A record number of prospective buyers are enquiring about properties on  Rightmove. Demand in the housing market is 34% higher than the strong pre-lockdown market from a year ago. At the same time, supply is remaining low.
Currently, the growing demand is outstrip- ping the number of homes on the market. This is happening by the most substantial margin at any point over the past decade. The current market conditions is making it one of the best sellers’ market of the past 10 years.
34%
UK IS TOP HOTSPOT FOR EUROPEAN AND OVERSEAS RESIDENTIAL INVESTMENT POST-BREXIT
7
OF INVESTORS PLAN TO INVEST IN EUROPEAN RESIDENTIAL ASSETS OVER THE NEXT 12 MONTHS DLA Piper Investment Survey results
75% Global law firm, DLA Piper recently published its UK and EU investment survey results, revealing that nearly three-quarters of investors plan to invest in European residential assets over the next twelve months. The survey of 500 investors, developers, and asset managers with more than USD3bn AUM from across Europe, China and the US, ranks the UK highest for future residential real estate investment. Indeed, from those surveyed only 11% of investors feel negative about the current outlook for the European Real Estate Market.
The top reasons respondents cited causes to be optimistic were that there is high demand due to a shortfall in supply (43%), real estate income yields are higher than those for fixed income (43%), and asset prices remain attractive (40%).
Commenting on the findings, Olaf Schmidt, Real Estate partner and Managing Director of Practice Groups at DLA Piper, said: “Investment in European residential real estate assets has been traditionally consid- ered a market for local investors and it was largely dominated by local asset managers. High barriers to entry due to the existence of different national market practices and legal systems made it difficult to enter this market. However, over the past few years this has changed. Residential developers went international, asset managers have created teams specialised in the residential market segment, institutional capital opened up, and asset managers can now invest in the various forms of residential assets across Europe.”
“INVESTMENT IN EUROPEAN RESIDENTIAL REAL ESTATE ASSETS HAS BEEN TRADITION- ALLY CONSIDERED A MARKET FOR LOCAL INVESTORS AND IT WAS LARGELY DOMINATED BY LOCAL ASSET MANAGERS. HIGH BARRIERS TO ENTRY DUE TO THE EXISTENCE OF DIFFER- ENT NATIONAL MARKET PRAC- TICES AND LEGAL SYSTEMS MADE IT DIFFICULT TO ENTER THIS MARKET. HOWEVER, OVER THE PAST FEW YEARS THIS HAS CHANGED. RESIDENTIAL DEVELOPERS WENT INTERNATIONAL, ASSET MAN- AGERS HAVE CREATED TEAMS SPECIALISED IN THE RESIDEN- TIAL MARKET SEGMENT, INSTI- TUTIONAL CAPITAL OPENED UP, AND ASSET MANAGERS CAN NOW INVEST IN THE VAR- IOUS FORMS OF RESIDENTIAL ASSETS ACROSS EUROPE.”
@chriscurry92
8
A recent report undertaken by Savills March 2021 suggests that an average UK Price growth of 20% is sustainable over the next five years without unduly depleting mortgage affordability.
Indeed, for the North West, the residential prime capital values forecast looks particu- larly strong showing a 28.8% increase up to 2025.
LIKELY INCREASE IN RESIDENTIAL PRIME CAPITAL VALUES BY 2025 Savills
28.8%
NORTH WEST LEADING THE WAY IN FIVE YEAR GROWTH FORECAST
2021 2022 2023 2024 2025 5-year
Prime Central London 3.0% 7.0% 4.0% 2.0% 4.0% 21.6%
Outer prime London 2.0% 5.0% 3.0% 2.0% 2.0% 14.8%
All prime London 2.5% 6% 3.5% 2.0% 3.0% 18.1%
Suburbs 5.0% 3.5% 3.0% 2.0% 3.0% 17.6%
Inner Commute 5.0% 3.5% 3.0% 2.5% 3.0% 18.2%
Outer Commute 5.0% 3.5% 3.0% 2.5% 3.5% 18.7%
Wider South 5.5% 4.0% 4.0% 3.0% 3.5% 21.6%
Midlands / North 4.5% 4.0% 4.0% 3.0% 4.0% 21.1%
Scotland 5.5% 4.0% 4.0% 3.5% 4.0% 22.8%
All prime regional 5.0% 4.0% 3.5% 3.0% 3.5% 20.5%
ECONOMIC BOUNCE BACK Savills report predicts an economic bounce back by 2022, encouraged by the Government’s levelling up-agenda, which will likely support the patterns of regional price growth as well as the continuation of the base rate at 0.1%.
UK INVESTMENT GUIDE | 11
The UK’s Fastest Levels of Growth Regional price forecasts
LONDON
House price growth % pa 2018 2019 2020 2021 2022 2018-22*
Manchester 6.5 4 3.5 3.5 3.5 22.8
Liverpool 4 3 3.5 3.5 3.5 19.3
Leeds 3.5 4 3.5 3.5 4 19.9
UK 1 2 2 3 3 12.6
Rental growth % pa 2018 2019 2020 2021 2022 2018-22*
Manchester 3.5 3 3 3.5 3.5 17.6
Liverpool 3.5 3 3 3.5 3.5 17.6
Leeds 3.5 4 3.5 3.5 3 18.8
UK 2 2.5 2.5 2.5 2.5 12.6
JLL’s The New Housing Paradigm Residential forecasts – Northern England UK Residential Research | February 2018
Over the past 24 months, Manchester has further cemented its position as the most attractive city centre residential investment market in the UK. Despite national and global turbulence, Manchester’s momentum has continued to grow and is forecast to continue on an upward rise up to 2022.
LONDON VS THE NORTH
Before the pandemic, investors (when looking at property investment opportunities in the UK) were likely to consider Central London or one of the UK’s city regions, in particular the North West.
Recent studies have proved that despite its bright lights, hustle, bustle, heritage and majestic grandeur – Central London is showing the UK’s slowest level of growth over a five-year period.
EASTERN
12
210,000
220,000
230,000
240,000
250,000
260,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
The data revealed that the City of Manches- ter’s population rose by an additional 5,231 people between 2018 and 2019, giving it a new population of 552,858. The city breached half a million people in 2011 and is due to hit 600,000 by the middle of this decade. This makes Manchester England’s fastest growing city.
This growth, supported by a rising population of more than 2.8 million people in the Greater Manchester conurbation, demonstrates how Manchester’s housing demand continues to outstrip supply and its lower cost of living is one of the main reasons why people choose to move here from the capital.
Students, Alumni, young professionals and young couples are more and more looking for a life which can provide everything they need on their doorstep and they are flocking to Manchester in order to experience what
the city has to offer. The ten metropolitan boroughs of Greater Manchester – Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, and Wigan – represent the largest city region economy outside London, with a gross value added (GVA) of £62.8 billion. With up to 40% lower operating costs than London it is no surprise that Greater Manchester is the chosen location for business.
Over the past decade, the Greater Manches- ter region has benefitted from a multi-bil- lion-pound injection of public / private sector investment for business and infrastructure and continues to boast the UK’s largest regional Airport with connections to over 200 countries worldwide. The government’s pledge to invest a further £7 billion into North- ern Powerhouse infrastructure proves that Manchester is ready and waiting to unlock that investment and to continue to underpin Manchester’s reputation as a global city.
In 2019, the Office of National Statistics revealed that Manchester’s population grew faster than any other English city in the year to summer 2019.
Existing Housing Stock
Minimum Household Demand
city’s growing population
plus latent demand built up within the existing population -
including hidden or as yet unformed households
In 2019, the Office of National Statistics revealed that Manchester’s population grew faster than any other English city in the year to summer 2019.
MANCHESTER POPULATION IN 2019 The Office of National Statistics
WHY GREATER MANCHESTER
GOVERNMENT PLEDGE TO INVEST INTO NORTHERN POWERHOUSE INFRASTRUCTURE The Office of National Statistics
£7BN
POPULATION GROWTH IN SALFORD BETWEEN 2018 AND 2019
4,426
A recent surge of regeneration and financial investment in Salford has seen investment opportunists looking to Manchester’s desirable neighbour for their next purchase.
Indeed, the ONS revealed in 2019 that England’s second-fastest growing city is in fact Salford and grew by 4,426 people between 2018 and 2019.
Over the past few years, the city has seen a new calibre of businesses taking resi- dence in the city, increasing employment levels and acting as a catalyst for new, exciting property developments either completed or now
under construction thanks to several multi-million-pound regeneration schemes. Salford Quays and MediaCityUK, together with a first-class university and upcoming student district al serve as the city’s main attractions, which understandably makes it one of the more desirable districts for tenants and investors.
Salford is a popular place to live for the younger, digital focussed renter – from the initial relocation of the BBC and ITV studios, many employees chose to move up from London and found themselves a home in Salford, thus leading to significant uplift in demand.
WHY SALFORD @simonwatkinson
UK INVESTMENT GUIDE | 17
16
At Salboy we have a strong, proven track record for delivering quality, first-class developments without compromise. With a strong financial backing, we have delivered over 2,400 homes and have created over 3,500 jobs through doing so. Our goal is always to develop for the long term – astutely, sensitively, and with a sense of social purpose – delivering the homes and workspace that our UK cities so desperately need. Because of approach, we boast higher occupancy levels than other developments and, despite the pandemic, we have seen consistency in our rental rates throughout 2020.
We are North West based and we invest our own money, time and resources into large scale developments in particular, in Manchester and Salford. We believe that these cities have what it takes to provide truly unique places for people to live, work and play. We have confidence that both cities will come back from this downturn stronger than ever with a true and deter- mined Mancunian and Salfordian spirit.
If you are interested in investing in any of our developments then get in touch, we’d love to talk to you.
Simon Ismail – Managing Director Salboy
ABOUT SALBOY
At Salboy we have a strong, proven track record for delivering quality, first-class developments without compromise. With a strong financial backing, we have delivered over 2,400 homes and have created over 3,500 jobs through doing so. Our goal is always to develop for the long term – astutely, sensitively, and with a sense of social purpose – delivering the homes and workspace that our UK cities so desperately need. Because of approach, we boast higher occupancy levels than other developments and, despite the pandemic, we have seen consistency in our rental rates throughout 2020.
We are North West based and we invest our own money, time and resources into large scale developments in particular, in Manchester and Salford. We believe that these cities have what it takes to provide truly unique places for people to live, work and play. We have confidence that both cities will come back from this downturn stronger than ever with a true and determined Mancunian and Salfordian spirit.
If you are interested in investing in any of our developments then get in touch, we’d love to talk to you.
WATCH THIS IS GREATER MANCHESTER VIDEO
Simon Ismail – Managing Director Salboy
DOWNLOAD OUR FREE ROI EXCEL TOOL
FIFTY5IVE, MANCHESTER & SALFORD CITY CENTRE UNDER CONSTRUCTION
Designed by Jon Matthews Architects, Fifty5five provides  a totem for the entrance to  the Greengate Masterplan area. With a primary frontage facing Trinity Way the scheme is composed of three distinct blocks, arranged around a central core to provide a series of high quality apartments and duplexes. Resident’s amenity space includes south facing roof terraces and a communal resident’s lounge.
VIADUX, MANCHESTER CITY CENTRE UNDER CONSTRUCTION
The elegant 40 storey tower, designed by internationally renowned Simpson Haugh Architects, will feature high quality one, two-bedroom apartments and will benefit from extraordinary views across the city centre skyline.
LOCAL CRESCENT, MANCHESTER CITY CENTRE COMPLETE
Local Crescent is a unique community comprising 399 apartments and seven townhouses spread across three distinct towers with uniquely striking façades. Heated swimming pool, cinema room, yoga studio, gym, laundrette, courtyard gardens, coffee shop, solarium, sauna & spa.
THE PRESS, MANCHESTER CITY CENTRE COMPLETE
A modern conversion in the business district of N.O.M.A. A key part of Manchester’s history is this Grade II-listed building, which is now reborn as The Press. Comprising 66 New York-style apartments, The Press blends thoughtful design and premium materials, with a wealth of original features.
© Salboy Ltd 2020. All rights reserved. Salboy is a registered trademark (UK00003374975). Salboy Limited is a registered company in England and Wales (Company #09123542) & Salboy
International Limited t/a Salboy is a registered company in England and Wales (Company #10739544) with registered offices at Unit 3 Birchwood One Business Park Dewhurst Road, Birch-
wood, Warrington, England, WA3 7GB. Salboy International Limited is a member of the Property Redress Scheme (Member #PRS020066) and adheres to its
Code of Practice.