Friday 18 March 2022
There are a few fundamentals to consider when searching for a property investment. These are what make a city great for property investment:
4. Consistent Economic Growth
In the Good Growth for Cities Index by Demos-PwC, Preston was named the best city to live and work in the north-west of England for the fourth year running. In the 2020 index, Preston also ranked 16th overall out of 42 UK cities, scoring relatively high across all UK averages except for income, which is likely to naturally grow as Preston sees large scale investment in the coming years.
Investing in Preston can not only help experienced investors diversify their portfolio by buying property in an emerging market. The city also provides opportunities for new investors and homebuyers with less capital. The north-west as a whole is forecast to see house prices increase by 24% across the next five years, and with the regeneration and investment coming to the city, investors expect Preston to see further growth in house prices and rental yields in the coming years. Below are some of the fundamentals that will provide the foundations for this growth.
Connectivity and location is a key selling point when it comes to Preston. In the heart of the Northwest, Preston is strategically located within the commuter belt of major Northern Powerhouse cities, such as Liverpool and Manchester. It’s extensive road and rail networks allow both Manchester and Liverpool to be reached within 45 minutes, while also enabling ease of access into beauty hotspots, such as the world heritage Lake District National Park, within the hour.
If wanting to go further afield, Blackpool airport is just 18 miles away, flying to multiple European destinations. As well as Blackpool, a direct train to Manchester airport can be taken from Preston, taking just an hour, and flying internationally to nearly 200 destinations.
Although connectivity is already in abundance, the future is still brighter for Preston, in the form of HS2. This will allow further away UK destinations, such as Birmingham and London, to become much more accessible and commutable. This new high speed rail network will be more frequent, and reliable, joining up the cities of the north and the midlands, as well as more seats, more often heading north to Cumbria and Scotland. This change reduces the time to Birmingham from 96 minutes to 50 minutes, and London from 128 minutes to 78 minutes (Within the London commuter belt).
Preston has seen huge amounts of regeneration in recent years and has big plans when it comes to regeneration and investment in the future. A 10-year, £430m City Deal was signed in 2013, which has seen numerous works done across the city, with projections of it adding up to £1bn into the local economy. There have been a number of recent developments that have been given the go-ahead or have begun construction. To name a couple, there is the £40m city centre leisure development, Animate, which will deliver a cinema, bowling attraction, food and drink venues, further parking, and a public square. A £20.7m fund for the Harris Quarter is also in place, some of it going to Animate, which will see many public buildings such as the museum and library being revitalised and given a new lease of life. Regeneration initiatives in this sector, provide locals with a more enriched way of life, making Preston not only a lucrative business hub, but a nice place to live.
Another area of the city that has, and still is undergoing lots of investment and regeneration, is student infrastructure. There is a £200m masterplan in place for The University of Central Lancashire (UCLAN) which has seen many improvements come to fruition, since it started in 2015. This has seen a newly built £60m university centre and square, the Engineering Innovation Centre (EIC), a £32m testing and research facility, £8m social spaces and countless other improvements.
With investment and expansion comes an increasing workforce and population. From the planning and construction to the operations of these developments, thousands will be part of the chain. The £430 million City Deal will lead to the expansion and improvement of the transport infrastructure in Preston and South Ribble at an unprecedented rate, enabling a forecast 20,000 new jobs. This surge in jobs results in property demand spiking, generally faster than it is met. This provides good foundations for consistent.
In 2018, 37% of students across Lancashire chose to stay when entering the professional workforce. UCLAN itself has 38,000 students – one of the largest campus populations in the country. That’s also more than a quarter of the city’s residents. Investing in their connections, prospects and wellbeing will only raise the chances of someone staying when they graduate.
There are several big employers these students then go to in the local area. These are facilities such as the NHS, with leading industry facilities such as teaching hospitals and leadership academies, BAE HQ, a multinational aerospace company, DAF a large truck brand employing over 1,100 at their site and EDF Energy just to name a few. As more money gets pumped into Preston and the area naturally expands, the number of companies will only grow as it becomes a lucrative hub for business.
Consistent Economic Growth
With the previous fundamentals naturally comes economic growth. Facilities are improved, demand and attraction to the area is boosted, more jobs are created, and more money is generated, which then goes back into the area and begins a cycle. Below are a few examples of where this economic growth will come from.
Firstly, the Lancashire Enterprise Partnership believes that productivity gains from the impact of HS2 services to the area could help provide an extra £600m for the region, and HS2 could mean 75,000 extra visitors a year, adding £3.3m to the city’s economy annually.
Another strong sign that more employment and investment is coming to the area, is the relocation of the governments National Cyber Force (NCF) to where BAE is located in Samlesbury, just 20 minutes down the road. This purpose-built site will see more than £5bn in funding and creation of thousands of jobs.
A final sign of this consistent economic growth is Preston’s tech industry, with it being the fastest-growing UK city for tech jobs, with the number of IT-related roles in the city increasing by 53% between 2018 and 2020, according to data analysed by Adzuna for the Digital Economy Council and industry ChampionTech Nation. In the last 3 years, there has been a 6% increase in tech jobs around the city. This increase in demand for skilled tech workers, has resulted in the increase in median digital tech salary in Preston. This uplift in available roles isn’t just confined to the tech industry, too – open job opportunities in the Northwest have been increasing 12% month on month throughout 2021 to 106,197 in June. Digital Secretary, Nadine Dorries, said: “I’m delighted to see Preston has become a hotbed for tech with an explosion of demand for developers and systems engineers across the city.”