According to law firm Irwin Mitchell’s latest FDI (Foreign Direct Investment) report, the North West property sector is primed to see significant investment from overseas buyers.
Irwin Mitchell has compiled the summer 2023 report in collaboration with leading economic consultancy Cebr. It offers foreign investment analysis and ‘on the ground’ commentary on the UK’s largest cities and key sectors.
The UK real estate section of the vital sector insights states that the property industry (grouped in with hospitality) had an investment position of £209 billion in 2021. However, this figure took a hit due to COVID-19, Brexit, and the war in Ukraine.
While not immune to these challenges, the appetite for investment in the UK from overseas has proved to be resilient.
According to the report, the property market in London remains desirable to foreign investors, especially when it comes to Grade A office space.
There has been an increase in taxes for property investors, and regulations have tightened, but this hasn’t put off international buyers, who continue to choose the UK over other countries.
In particular, strong growth has been observed in the North West and the West Midlands. There were 88 new investment projects in the North West last year, up 20% compared to before the pandemic, which suggests the region has quickly recovered from the lull in investment over the past few trying years.
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The Key to More Foreign Property Investment is ‘Levelling Up’
According to Adrian Barlow, the firm’s National Head of Real Estate, ‘continued levelling up is key to maintaining investor interest in areas outside the capital’.
With many exciting regeneration projects in the North West, the future of foreign property investment in the region seems promising.
This includes massive plans such as Liverpool Waters and the Atlantic Gateway scheme.
As part of Liverpool Waters, Canadian investor Starlight Investments is taking on a 31-story residential tower. This build-to-let scheme has a development value of £50m and will add to the company’s £20bn North American portfolio, showing that overseas companies are eager to be involved in the North West property market.
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Why Are Overseas Investors Interested in the North West?
There are plenty of attractive factors for overseas buyers regarding North West property. This includes the region’s much more affordable property prices than other areas, such as those in the South of England.
For example, the UK House Price Index shows that the North West region’s average house price is £215,648, while the average house in the South East goes for £394,096.
Another reason the North West appeals to foreign real estate investors today is the prediction for high capital growth in the area. According to property experts Savills, the region’s mainstream capital value is forecast to grow 11.7% over the next few years leading to 2027, while the South East is set to hit just 3% growth in the same timeframe.