As London is now perceived as being expensive to investors, the spotlight is swiftly shining on the UK’s outside regions and beyond.
Regional activity has been a key focus in the last few years and this sentiment remains, but with an added interest in both Scotland and Northern Ireland.
London and the South East are now perceived as expensive with narrowing yields, making other regions look the more attractive option.
In the next five years, investors expect to see greater yields commercially from the West Midlands and North West, indicating the appetite to grow and expand businesses in the North is increasing rapidly as London prices itself out of the market for many businesses. Northern Ireland also rates highly with experts, with over 70 per cent expecting to see commercial growth there.
London is becoming less and less of an economic option for people, and spreading further out of the capital is looking far more desirable to ensure a better work life balance.”
Howard Freedman, Head of Real Estate & Construction, RSM
While capital investments in residential property in London is seen as ‘solid’, returns continue to narrow. This would seem to explain why those surveyed thought that residential space yields are expected to be better in the South East, with the South West and Wales close behind. Rising prices and a shortage of affordable homes in London are pushing home buyers to eye up locations further afield, with many swallowing the extra commute time and favouring their slice of the property ladder beyond the city limits.
Remarkably, Wales, Northern Ireland and Scotland are all expected to attract more keen interest in the next five years, making us question what the effects on the housing market will be and what the appeal is to potential buyers. Lower housing prices, less congestion and the allure of working from home are all factors contributing to the building popularity in these three areas.
Whilst London and South East remain strong, those seeking value are looking further north.”
Eric Solomons, Real Estate Partner, RSM