The UK’s EU referendum battle is finally at an end, but now is the time that the UK’s fight for growth really begins. Until 31 December 2020, the UK will remain in the EU single market and the customs union. Ultimately, we are amid a state of on-going economic and political uncertainty.
We caught up with CEO of UK crowd funding and peer to peer lending platform The House Crowd, Frazer Fearnhead. He kindly shed some light on noticeable investment trends brought on by Brexit, the on-going development of the North West and forecasting of the UK property market over the next 10 years.
Since Brexit was first established in the June 2016 referendum, up until Brexit eve on the 31st January, 2020, what differences / trends have you experienced within the property investment market?
Foreign investment continued to come into the UK market despite Brexit as it is still seen as a safe haven. Many UK investors certainly moved away from London and looked to higher growth areas in the Midlands and North West where both of which have seen increases of 16% or more in average values since the referendum.
In 2019, with the increasing frustration around the seemingly never-ending Brexit saga we did experience a fall-off in levels of investment as people sat on their money but ever since the general election there has been a marked change in attitude.
Now the UK has left the EU, have you noticed any sudden changes appear?
No sudden changes (unlike the stock market things do not change that rapidly in property) but I think there, was a huge sigh of relief that Corbyn wasn’t elected and things that had stagnated in the property market have started to move and there is a renewed sense of optimism.
Are there any predictions as to how Brexit will impact the property market throughout the UK in 2020 — and are there any regions to pay particular attention to?
Prices in the North West have increased by 16% since the referendum and that trend is forecast to continue.
This trend is likely to continue, with the influx of big businesses in Manchester – from media behemoths like ITV and the BBC to tech and retail firms like Amazon – stimulating growth.
In fact, experts predict around 3,100 new jobs per year will be created across Manchester between now and 2034. And with living costs lower in the North West, plus access to world-class transport facilities, the city is now more attractive – and more affordable – than London.
Many people are thus choosing Manchester over the capital, seeking both job prospects and quality of life.
We can expect demand for housing to grow further in the Greater Manchester area, too.
How about the next 10 years?
In terms of high capital growth, I would suggest looking at places such as Stockport which is undergoing a huge (much needed) regeneration programme. Also, Wythenshawe and Northenden are set to benefit hugely from the infrastructure investment into Airport City.
Are there any trends you are already noticing within the North West property market / investments made with The House Crowd?
City centre apartment tower blocks continue to sprout up – with support from government and the council despite concerns about over-supply.
Altrincham has led the way in creating a blueprint for the regeneration of run-down town centres. Prices are already steep in Altrincham with property values being some of the highest in the UK. Despite that million pound plus properties are getting snapped up and decent terraced houses are selling for high six figures – it’s definitely a sellers’ market.
Urmston and Stockport are following Altrincham’s example and Stockport, in particular, is attracting investors now that the regeneration project is well underway.
What advice would you give to property investors wanting to invest within the North West?
Capital growth is great, but it is speculative. Nobody knows what will happen and values could go up or down.
Your primary concern should be to earn a decent yield. Buy property that you will by able to rent quickly and that is easily affordable by your target market. If you buy at the right price in an area that is undergoing serious regeneration, then you can increase your chances of that capital growth but don’t count on it. Do not subsidise rental in the hope property prices will increase (I learned that lesson the hard way!).
The House Crowd has recently launched its auto-investment model. Is there anything else new on the horizon for 2020?
We will seek to review and refine the auto invest products to tailor them to client requirements. We will be very much focused on attracting new funds to our Innovative ISA products and on attracting clients who would like to invest in residential property via their SIPPs. Something we believe there is a pent-up demand for as although many people have a desire to invest in residential property via their pension it has proven difficult if not impossible to do until recently. After years of working on it we have created a solution in partnership with a 3rd party SIPP provider.
The House Crowd is the UK’s original property crowd funding and FCA accredited peer to peer lending platform. For more information, please visit: https://www.thehousecrowd.com/