Newcastle is in the great Northern Shake up, which is seeing record economic figures across the entire northern United Kingdom. With Cities having Billions invested across them, unused land and derelict buildings are becoming extinct in all major cities of the north. It is an exciting age for the UK and it is at a time where literally every major town or city is seeing growth. With Foreign investors jumping at the fall in the Pound, it has only having the opposite effect that was predicted after Brexit, with Foreign investors pushing the property investment market to new heights. Although it is a little slower to the trend than say Manchester, this is actually making it a more affordable city with more room for potential growth to invest in. Investing in Newcastle today could be compared to investing in Manchester or Liverpool 10 years ago, your returns would be incredible and resale values through the roof.
The student sector is seeing the most promising growth, with nearby areas such as sunderland moving in tandem with Newcastle to double the areas potential. As professional consultants we are predicting a huge rise in property investment throughout Newcastle and the Tyne Wear area.
Newcastle or Newcastle Under-Tyne is considered a major city of both the UK and of Europe, being the North’s most populous city and the UK’s 8th most populated it is part of the United Kingdom’s core city group. Further to this it is also part of the European network of major cities also known as Eurocities. This should put to bed any ideas that Newcastle is anything but an insignificant city. Newcastle was originally part of Northumberland until it became a county of its own joining with Tyne and Wear. The city is home to Newcastle University, which is part of the Russell group of elite Universities as well as playing host to Newcastle United a world famous sports team.
Newcastle’s original economic power dwelled in the wool trade and coal mining, like many cities such as Liverpool it was struck by the mining strikes, although it had an impact on the area it was not as extreme as other parts of the country and is now a part of the city’s history which it has now fully recovered from. Newcastle quickly became home to one of the world’s largest ship-repair yards as the British Empire was at its strongest. The modern economy is now built around corporate headquarters, learning, digital technology, retail, tourism and cultural centres as like many other industrial cities of the past have had to adapt to the 21st century and the digital age, in total Newcastle contributes over £13 billion towards the United Kingdom’s GVA.
Newcastle’s educational and commercial sectors are in partnership with nearby Gateshead, not only making it stronger but also part of the cultural focus for North East England. With its strong commercial and cultural performance Newcastle’s largest shopping centre Eldon Square attracts 34 – 36 million visitors yearly since 2012 making it the 5th busiest shopping centre in the UK. Like many Northern cities Newcastle is seeing huge redevelopments and regenerations over the last decade and continues to do so. It is also worth noting that In a 2004 report, it was ranked as the most expensive shopping street in the UK for rent outside London, indicating the demand and possible rental yields available In the area.
With a population close to 300,000 and a 25% increase in flats and waterside apartments it is no strange occurrence for demand to outweigh supply. The population of the area can be considered far higher than this as the Tyne and Wear area consists of several large and small cities and town, including Sunderland, which is of almost identical size and proportion to Newcastle, this totals the population at around 1,076,000 people.
With prices in southern cities such as London at an all-time high it is often difficult to start investing with insufficient funds, and so is often the case that rental yields in Northern cities are far more attractive, especially to the first time investor promising yields of 9 even 10% at a much lower entry price. These lower prices coupled with the fact that more investors can enter the market at these lower prices means that Northern cities are seeing a faster rate of investment than places such as London and surrounding areas.
The city is a thriving place for student populations, over the last 10 years it has seen a 30% increase in international students and has over 10,000 purpose built beds for students making it the city with the 2nd highest number of purpose built accommodation with a total student population at over 53,000 bringing it is close to Liverpool and Manchester in its student capacity. The current demand ratio is 5 students chasing every purpose built bed, meaning PBSA stock carries 70% rental premiums, with a growing international student population this could only grow further and mathematically means the increase in PBSA could multiply several times over in the coming years.
Newcastle’s student population has seen staggering population increases, with a rise of 46% over just a 6 year period, some years seeing over a 10% yearly student increase. Although it is still in a catchup with places such as Manchester, its boom in student population sends it on a trend which is unparalleled, as experienced investors understand it is quite often the case to try and invest ahead of the trend, Newcastle and nearby Sunderland are definite front runners for best places to invest within the next couple of years. The most important figure to consider is that of student population compared to that of available bed space. In this same 6 year period the student populous grew around 46% whilst the available bed spaces only grew by 19% leaving a huge gap in the market. Several years on and the student population was estimated to be at around 44,000 but it is now over 53,000, predictions have only under-sold the city and may continue to do so. Today Newcastle has around 70% more students than it did in 2001.
Newcastle is currently benefitting from positive statistics, such as Oxford Economics predicts that over 9500 more jobs will be created in Newcastle over the next decade, this includes a strong replacement demand for those leaving labor intensive jobs, meaning it will see stronger business markets in its sciences and commercial sectors. It has seen the highest demand for office space since the recession ,indicating its recovery, this is in parallel with house demand being up 8.5% in just one year pushing house prices up by 0.7%. This recovery can be partly thanked to council investment programmes which include work to improve the Central Station as a key gateway to the city, new buildings at the Stephenson Quarter, Science Central and housing development at Scotswood.
There is little to no doubt that the best investors market in Newcastle at this time is in its student sector. However, this has been proven to have a knock on effect on the entire economy. Using Liverpool as a case study we can see the effect that both regeneration and a boom in student population can have on a city. Liverpool after its huge Investments won Cultural Capital of Europe as well as seeing record figures in all its markets, including tourism, commercial, residential and student property. Newcastle is where Liverpool was 10 years ago and at the start of its own renaissance, this makes it one of our top tips for best places to invest over the next 10 years. Our own expert consultants are excited about delivering Newcastle to all our clients impressive portfolios.
The plans for this area our a real deja-vu if your familiar with Liverpool and Manchester. The area consists of 17HA and is situated directly next to Newcastle’s city Centre and includes a mixture of listed, underused and derelict buildings. Like many modern projects it plans to create a modern, open and pedestrian feel to the city vastly increasing desirability.
The scheme is designed to help accommodate the predicted population growth, partially brought about by the promise of other northern cities success and the fact that the exact same trends can be seen in Newcastle, starting with the Student Populous.