Chinese investors pour 2 billion into the Northern Powerhouse

China’s Hualing Industry and Trade Group has pledged to invest billion in the UK’s Northern Powerhouse.

The UK government’s plan to rebalance the UK economy throughout the country has received a boost as the Chinese institution has agreed a deal that could see more than 10,000 new homes built in the North, in addition to creating 18,000 jobs throughout the Northern Powerhouse region.

The investment being made will be split between three major projects that are set to take place in the key strategic locations of Manchester, Leeds and Sheffield.

Chancellor George Osborne, who is currently on a diplomatic visit to China’s Xinjiang region in the north west of the country, welcomed the news, saying: “We are building an ever closer relationship with China – it’s a partnership that is set to unleash growth and help regions like Xinjiang where we know investment can make a real difference, as well as unleash new growth back home, in places like our own Northern Powerhouse.”

The investment from China, following David Cameron’s recent trip to the country to explain the possibilities available in the Northern Powerhouse, is a big coup for the government’s plans.

Cities across the North are scheduled to benefit from more than billion of investment in the coming years, as the government aims to create greater parity with London’s economy across the UK.

Expats return to UK for attractive property investments

British expats are returning to the UK as the home of their property investments, according to the latest research.

Growing rental demand and the relative strength of the UK property market has seen a surge in the number of British expats looking to invest in property.

Mortgage lender deVere Mortgages has revealed that of the enquiries they received in the opening quarter in 2015, 75% came from British expats.

The lender suggested that the current fluctuations in currency exchanges have led to the UK being seen as a more attractive and affordable prospect, with the dollar standing strongly against the pound sterling at this time.

The strong economic recovery, the rise in demand for rental property and the lack of housing available in the private rented sector have worked to create optimal conditions for property investment purchasers looking back to the UK for opportunities.

The capital continued to fair well amongst expats, with London providing better value than many other world cities. However, London remains a difficult area for first time buyers to enter, with increased rents and house prices, in addition to a lack of supply, forcing many to look outside the capital.

This transition to the regions is expected to be mirrored by property investors as well, as rental return in London begins to drop. Increased availability and affordability is attracting prospective tenants to areas outside of London, while the increased rental return available outside of the capital makes an excellent prospect for investment buyers.

How international interest is driving the UK’s student accommodation sector

Increased capital and a world-leading higher education system are helping to make the UK’s student accommodation market one of the largest in the world.

2015 has already been a record-breaking year for the student property market, with Q1 seeing billion worth of investment – surpassing the entire total value of transactions in 2014.

The surge of activity in the sector has been mainly driven by the completion of a number of high profile transactions for large property portfolios on behalf of private equity and pension funds.

The international interest in the UK’s student market has helped it to buck the trend usually seen in an election year, performing strongly in spite of the uncertainty associated with the months prior to the polls.

Already the UK’s best performing asset class, the rise of purpose built student accommodation developments and the strength of the UK’s university system has been an attractive prospect for property purchasers around the globe.

Over the past three years, property agent Hopwood House estimates that nearly bn has been placed within the sector, with most industry predictions expecting the asset class to continue to grow.

This expansion has been particularly prominent amongst international investors, as the stability of both the UK’s student accommodation and the property market in general has been seen as an encouraging factor for potential purchasers.

International interest in the UK’s education system has long been felt through the widespread growth in the number of international students wanting to study in the UK.

Worth approximately bn to the UK’s economy, the number of international students in the UK has already doubled in the past decade, with a further increase of 15-20% expected in the next five years. It is these international students who have also been the main tenants for purpose built student accommodation blocks, with domestic students only recently beginning to move towards these more modern and luxurious options.

The shift in student tastes towards purpose built student accommodation has helped to grow the student accommodation market to the record quarter it has experienced this year. With the large number of international students expected to join the UK’s education system over the coming years, the sector is forecast to continue on its upward trajectory.

Russians look to UK’s regions as Moscow vacancy rates rise

The continued decline of the Russian property market and the rouble has seen Russian investors turn towards the UK.

As vacancy rates for commercial property in Moscow look likely to reach 45% soon, property investment in the Russian capital has subsided as the market has been flooded with completed properties, the legacy of delays from the financial crisis in 2008.

The Russian property market has also been impacted by the wider economics of the country. With the strength of the rouble fading in recent months against the dollar, Russia is now providing less safety for property investment buyers.

The World Bank has also stated their belief that the Russian economy will continue to contract, shrinking a further 3.8% this year and then by 0.3% in 2016. These reports have been a component part of the Russian investment exodus over recent months.

The tried and tested London market is continuing to generate interest from Russian investors, but many are starting to look to the regions as an alternative to the capital. London’s market now offers properties that stand at inflated prices and offer smaller returns as a result.

This is dissuading Russian buyers from the capital, with Christie’s International Real Estate estimating that there has been a fall of 70% in the number of wealthy Russian buyers in London.

Buy-to-let purchasers benefit as demand for rented accommodation grows

The strength of the UK’s rental sector continues to grow as the average rent increased again.

Over the last two quarters of 2014, buy-to-let property investments saw an increase in average rents of 4.2%, according to the latest research from Countrywide.

The increase in rent levels has been driven by an unusually high number of tenant applications in the second half of the year, with 7% more applicants signing up than in the first half of 2014. The report also found that, of the properties that changed ownership last year, 14% moved from property ownership into the rental sector.

Growing demand for rental properties has led to an increase in all areas of the rental market, with renewed rents at the end of 2014 also rising by 2.9% as landlords continue to experience excellent market conditions.

The report stated that the current market conditions favour landlords and property investors, with the fall in supply limiting the amount of house purchasing opportunities available in the UK housing market.