Chinese Property Investors back the UK’s Northern Powerhouse
The Northern Powerhouse project is a government scheme designed to address the North-South economic imbalance, and attract more investment into the north of the UK; with a particular focus on the ‘core cities’ of Manchester, Salford, Liverpool, Leeds and Sheffield.
Whilst one of the core goals of this strategy was to increase investment in the region, what has taken many by surprise is the enormous levels of investment coming from wealthy Chinese investors; who are buying substantial volumes of property and providing a firm foundation for the expansion targeted by the northern powerhouse project.
A recent residential development in Salford Quays saw just half of its apartments sold to local people. A quarter weresold to Brits living abroad and the remaining quarter were snapped up by wealthy Chinese investors.
These investors aren’t just buying property; they’re also building their own. Developments all over Manchester are being been funded by Chinese investors, with Chinese people making up a large proportion of the buyers. Even a slice of Manchester City Football Club has been sold to the Chinese.
"Their attitude to the Northern Powerhouse is stunning. It's insatiable," said Richard Wills-Woodward, an entrepreneur who helps wealthy Chinese individuals invest in the UK.
He points out that there are over 300million middle-class Chinese people; a figure equal to that of the entire population of the USA. Not only that but these middle-class investors have serious money to spend.
And they’re not the only ones. The Beijing Engineering Construction Group is investing £800million in Manchester's Airport City; including a hub for other Chinese firms to set up. The fact that Manchester now has direct flights to both Beijing and Hong Kong also makes travel much easier; and has led to predictions that Manchester's Chinese community will grow significantly in the coming years.
A move from London
This influx of Chinese money is having a direct and positive impact on the northern powerhouse economy. The high levels of investment are slowly increasing property prices and further strengthening the potential for capital appreciation in the region.
Up until recently, London was the UK’s primary location for buy-to-let property investment. Now, with the strengthening of the northern powerhouse economy, significantly contributed to by the massive Chinese investment, many investors are redirecting their capital out of London, to the northern powerhouse cities.
With the recent increase in stamp duty charges investors have even more reason to invest in the north. A property with an asking price of £250,000 will now come with an additional 8% stamp duty bill; making the higher prices in London seem less lucrative compared with the offering of cities such as Manchester and Liverpool. Properties in these cities are substantially cheaper, meaning investors are able to acquire high quality city centre property without crossing the £250,000 threshold.