08 Jan 2020
As the new year kicks in with Britain’s scheduled departure from the European Union shortly along the way, we will take a look at the top locations for property investment in the UK in 2020.
Commercial property already witnessed a boom in 2019, and will continue to experience a rise in the year to come. Many start-up businesses are relocating to cities and towns which offer adaptable workspace, as this provides companies with more flexible contracts which do not require much notice time in order to get out of. Adaptable workspace also often comes at a lower price.
Start-ups will favour a flexible workspace over a traditional office, due to the fact that in times of political uncertainty and with Brexit on the horizon, businesses would not necessarily know the exact lifespan of their start-up, of whether they would need to expand or scale-down their operations. Therefore, having a space which can provide opportunities for either scenario is crucial.
As small businesses migrate to other major cities beyond London’s confinities, it is estimated that this has the potential of contributing roughly over £12 billion to local economies over the next 10 years. As the uncertainty surrounding Brexit continues to mould Britain’s economy, flexible workspace could be the boost the UK economy needs.
Aside from firms relocating outside London’s border’s start-ups are also founding their businesses in local cities, increasing the opportunity and earning potential for residents. If residents are able to enter the job market and earn a sufficient wage, even the non-commercial property market will be impacted, as housing demand will rise.
According to research from the Resolution Foundation, the number of young adults moving for jobs has lessened compared to 20 years ago. In 1997, 30,000 were recorded having relocated in order to kick-start their career, compared to just 18,000 in 2017.
The following is a list of major cities which are considered the best places for property investment in 2020, according to new portal website BizNews.com.
Leeds is attracting businesses and start-ups due to its increasing employment opportunities, and the fact that it is an optimal place not only for working, but also living. It boasts a low unemployment rate of 4% and ranked 7.76 in quality of life, as per data from the Times.
JLL nominated Leeds as the number one location for house price and rental growth in 2019, expecting property prices to hike by 17.1% by the year 2023. Rental prices are also forecast to rise by the same percentage. As flexible spaces gain popularity in Leeds, property growth will escalate alongside, as people hunt for new jobs and businesses outside of London.
Newcastle has witnessed one of the fastest growth rates of flexible office space in all of the UK. In 2017, the number of co-working spaces soared by over 12%.
The north-eastern city is also home to one of the fastest growth rates of start-up businesses in the country. By the end of the 2017/18 financial year, 45,498 start-ups were recorded in Newcastle, marking an increase of 20.8% from the previous year.
Over a third of Newcastle’s students have said that after graduating, they still opt to find work in the university city. As flexible office spaces continue to increase, more diverse employment opportunities will likely come around, inviting more graduates to maintain their base.
House prices in the north-east region are also forecast to increase by 17.5% within the next three years.
Birmingham’s flexible workspace surpasses that in several other cities in Britain, representing 40% of total office space. It has attracted both start-up businesses and job-seekers due to several areas, including Digbeth, having been transformed into creative centres.
Furthermore, Birmingham’s central location means that other major cities are all within a 2-hour radius, convenient for those who work remotely but also travel for business. A recent report has revealed there is a strong link between the region’s job opportunities and property growth. Birmingham has witnessed a 12% increase in employment and a 23% rise in housing prices. As the demand for flexible workspace continues to surge, this will positively impact property prices and subsequently, the city’s booming economy.
Flexible office space is also an up-and-comer in Liverpool. In 2018, co-working and serviced office space made up 10% of the market. Instant’s Entrepreneurial Index reveals that the majority of flexible office space demand has come from start-up companies, particularly based in Manchester and Liverpool.
Although Liverpool’s economy has struggled in the past, the future is bright. As new businesses relocate to maritime city, the economy is on the path to recovery with housing demand on the rise.