Proper Wealth - Episode 9: The Manchester Property Market - Nathaniel Taylor (NPP Investments) - Nova

Proper Wealth – Episode 9: The Manchester Property Market – Nathaniel Taylor (NPP Investments)

Hosted in the Nova Cafe by our Managing Director, Paul Mahoney, Proper Wealth explores all aspects of wealth creation with a specific focus on Property. This 9th episode covers the Manchester Property Market, changes over recent years and why it is a good place to invest with Nathaniel Taylor from NPP Investments. Proper Wealth is broadcast in Property TV channel 198 on Sky.

Paul: Welcome to Proper Wealth, with me, Paul Mahoney. The show where we discuss all things wealth curation, including property. Today I have with me Nathaniel Taylor from NPP Investments. Welcome, Nathaniel.

Nathaniel: Thank you very much, Paul. Thanks for inviting me down.

Paul: So, obviously, we’re talking about Manchester as a buy to let hotspot. Being from Manchester yourself, perhaps we can start off with a general chat about Manchester as a place to live.

Nathaniel: Yeah, well, I say Manchester, I might be biased, because, as I say, I’ve lived there for the past five year or so myself, but it’s a fantastic place to live. I mean, the amenities that you’ve got there, the infrastructure that’s going into the city is absolutely fantastic, second to none. I mean, I think that the Northern Powerhouse, as such, living there you’re really seeing that coming along very, very well now. I mean, I live in an area called Castlefield, which is right in the center of the heart there, and you’ve sort of seen the development over the past five or six years, it’s been outstanding. New businesses coming to the area, which has been absolutely fantastic in terms of new bars, new cafes, new restaurants, etcetera, new shops. Which makes in it a very nice place to live.

Nathaniel: Going back to the infrastructure, in terms of what’s actually being plowed into the city. You sort of see an absolute massive change over the past five years. It’s been very, very good.

Paul: Excellent. Okay. Yeah, I think it’s always good to hear from someone who’s actually there because you read a lot about it, you see a lot happening, but I think a lot of people question things like the Northern Powerhouse, sort of terminology, that gets brandied around a lot, but is actually happening, or certainly seems like it is.

Nathaniel: Yeah, no absolutely. I think when you’re picking an area to invest in, I think you always got to look at the infrastructure that’s going into the place, the environment that you are investing into. One thing that is a big hit at the moment is the Northern Powerhouse and what’s going on there. And I think the guys over there, with the committee that’s doing everything, they’ve got it absolutely spot on. The expansion of the airport, which is over a billion pounds, which is going to make, well it is currently, one of the UK’s busiest airports there, but it’s going to make commuting into Manchester and all over the world much, much easier.

Nathaniel: You’ve got the HS2 line, which is due for completion in 2030, so again, that’s just making Manchester more accessible for the whole country. Which again, when you’re looking at somewhere to invest, you’ve got to look at these certain things, I do think. So new businesses coming to the are, I think in the next couple of years or so, it’s been reported, that about 1.5 million square foot of new office space is going to be developed in the city.

Nathaniel: So it sounds obviously, making all the right sounds to make a very, very good investment for anybody. For people in the UK, but again there are people all over the world.

Paul: Yeah. Well, yeah, a lot of UK’s major corporates are moving up there, aren’t they? You know, previously probably London based companies, taking more and more office space up there, and therefore creating more jobs.

Nathaniel: Yeah.

Paul: Which I suppose makes sense.

Nathaniel: Yeah.

Paul: As you say, the accessibility, also the cost.

Nathaniel: Yeah, absolutely. And I think it’s been a bit more of an alternative recently. But the candidates that we’ve got in Manchester, the people that work there, you’ve got two major universities. And I see that the post graduates are staying on there, so the caliber of staff that the companies are getting are very, very good. I read a report the other day and it didn’t really surprise me, but over eighty percent of the [inaudible 00:03:53] one hundred, unless you have a presence in Manchester, which is very, very good and says a lot for the city.

Nathaniel: I mean just outside of the city, you have an area called Sulfur Keys, which is a beautiful area to live it’s accessible by the Metrolink, it’s only five minutes or so, it’s a couple of minutes drive, but there’s plenty of IT companies that are going in there, a lot of different facilities are being placed there. The BBC are pictured there, along with the ITV. So again, it’s sort of seeing all these big corporate companies arriving in Manchester.

Paul: So it’s like a second city, isn’t it?

Nathaniel: Yeah, exactly. Exactly. But obviously it helps growth, it helps jobs, and obviously we, developers and such, in Manchester certainly have to keep up with that demand and the demand for properties in Manchester is very, very high. Along with the rental sector as well. The rental sector is very, very strong at the moment, very, very strong. So I say, again, making all the right sounds for a fantastic …

Paul: I suppose with companies like BBC and ITV, being based there, Manchester is becoming more sort of dominate in the media as well.

Nathaniel: Yeah. Absolutely.

Paul: It’s on the TV more.

Nathaniel: Yeah.

Paul: Which I think sort of works its way into people’s minds quite a lot.

Nathaniel: Yeah, absolutely. I mean we’ve actually got our own Manchester Games and such, which is a very, very fun weekend in Manchester. Which actually aired on the BBC, it obviously goes all over the world.

Nathaniel: Again, football clubs, we’ve got two fantastic football clubs. Though be it, I am a red, so it does pay me to say where Manchester, it obviously won the title recently. But again, it’s just opened us up to the world market, it’s the world market that we’re open up to, the exposure for Manchester is getting bigger and bigger and bigger. So it’s again, it’s a fantastic place.

Paul: How would you say some of the main to see these change since, for example, 2007, 2008. Obviously the last financial crisis, the city did quite well from a property price growth perspective then. How would you say it’s different now?

Nathaniel: Yeah, well I say again going back to the infrastructure and that’s improving. We’ve got more control of the money and where it’s being spent in the city, which again it is very, very important when you’re looking to improve a city, that you’ve got people who know the city as such. You don’t want to leave out, or lose, the tradition that Manchester certainly got so until the development that’s going up, it’s certainly within keeping. So again, the Metrolink system, that’s been a godsend in Manchester at the moment, so it just keeps expanding, expanding, expanding. And it helps people that live out on the suburbs come in to the city center.

Paul: How long has that metro system been in place?

Nathaniel: The metro’s been in place over twenty years, but now it’s just we’ve got some grants on the money, which has helped it certainly improve, a lot more lines going in there. The Metrolink is going into the middle of the night and the weekend as well, so obviously it helps people, revelers, in the city as well as going into the cafes and bars, etcetera. But again, for people for employment, that live outside the city, it helps them get into the city to work for these companies that are [crosstalk 00:07:03]

Paul: It certainly does seem like a more robust city. I believe it’s UK’s second largest city now.

Nathaniel: Yup.

Paul: And there seems to be the most, compared to any other city, aside from perhaps London, from an infrastructure spending perspective, population growth, economic growth, it does definitely seem to be the center of all that at the moment.

Nathaniel: Yeah, no, I certainly would agree with that. There’s a report, again just recently out, by Delio which shows actually Manchester is the fastest growing city in Europe. I mean HSB, one of the largest banks in the world, who’s has highlighted Manchester as being the [inaudible 00:07:39] hotspot in the UK. So I mean when you’re looking, I say again, looking at back to a place where you’re looking to invest, you do have to look at all these key stats, these key figures, and what the experts do say. I mean last year, in terms of growth in the property prices, you’re looking at over seven percent, which, again, is unheard of in terms of London, you’re not getting that return anymore. Again it’s the fastest growing house prices all over in the UK. So it’s obviously going in the right direction, the next four or so years you’re looking at the region of eighteen percent, depending on which report you do read. But I say it’s all going forward and forward and forward in terms of the prices.

Paul: I saw a stat the other day on net migration within the UK and that it’s actually going quite strongly away from London and the southeast toward the north.

Nathaniel: Yeah.

Paul: Which makes sense, you know, when you think about it. So as far as young professionals coming out of university, trying to buy their first home, and especially in London, they can’t buy anything.

Nathaniel: No, exactly.

Paul: When you’ve got property prices ten times average incomes, it’s very, very difficult to get on to the property ladder and those same people can go up to somewhere like Manchester and with quite similar money and buy a penthouse apartment in the center of the city for less than they could by a one bedroom apartment on the fringe of London.

Nathaniel: Yeah, no, absolutely. We’ve seen that quite a lot, obviously with investors and homeowners alike. You see that it’s more affordable for them, the average sort of price for a one bedroom apartment in Manchester you’re looking in the region between 180,000 and 220,000, depending on the location of it and where it stands in the city, where it is in the development. But again, it certainly is more affordable to live in Manchester and it’s an attractive place because in terms of the developments and what the developments are offered in Manchester, it’s a whole sort of community feeling, you’ve got more amenities on the site as well. Again, it’s making it an attractive place for people to live, where they have the gyms on the site, they have shops on the site, cinema rooms on the site, even some of the development sites have roof garden tarriances, which the community can enjoy. So again, it’s more affordable. [crosstalk 00:10:06]

Paul: There’s also been some progression in the type of property, you’re saying, sort of catering more to what people want.

Nathaniel: Yeah, exactly, exactly. I think again, going back to the Northern Powerhouse, the committee there, the planners in the city center, obviously the developers in there, it’s a case of they are thinking about what they’re doing before they’re doing it. And thinking what does the market want, what does the market need, what sort of people are going to be living there and, I say, we need to cater to the professionals that are working at these big corporate companies, that are coming into the city. So again, it’s vital that we’re going to be, well the developers, are going to be catering for them.

Paul: Okay and there’s been a few questions around how private landlords, especially in places like Manchester, might be able to compete against a lot of the bigger PRS guys coming into the market. What’s your take on that?

Nathaniel: Well, as I’ve said, I think in terms of the PRS schemes, going back to the planning and the council and what they have planned for the future and it’s vital that you do have a balance. The PRS schemes, there where you sell to your hedge funds and you’re big corporate companies so there’s a balance between what can be residential and what can be into a PRS scheme. So the balance is till very, very on the residential side.

Paul: They council is very well controlling that?

Nathaniel: Yeah, exactly. So going back to the point, it’s very important they know what they’re doing and they got a right, good vision a head of them in terms of what they want Manchester being and what they want Manchester to be like. And trying to make it attractive for homeowners and investors and your private investors also. I mean, there is certainly attractive yields to be had in Manchester. Your current yield you’re looking anywhere between six and seven percent on the rental market, so putting that along side the capital growth in terms of the prices, house prices that are going to increase, it’s still very, very accessible to your private landlord investor.

Paul: Okay, great. We’ll that’s all we’ve got time for now, but please join us after the break, because we’ll be back.

Paul: Welcome back to Proper Wealth with me, Paul Mahoney. Joining me again is Nathaniel Taylor from NPP Investments.

Paul: So, Nathaniel, before the break we spoke a lot about Manchester as a place to live, some of the changes in the market, and briefly on the property market, specifically. If we can delve a bit more into property now, obviously we’ve already spoke about some of the drivers, but I think it would be interesting to talk about what’s happened sort of from a price growth perspective over recent years.

Nathaniel: Yeah.

Paul: So if we can touch on that.

Nathaniel: Yeah, so I mean I think in terms of the city center, has provided the most growth in terms of the house prices, as house prices are going up, I think ordinarily, for a one bedroom apartment inside the actual city center, you were looking somewhere in the region of about 160 to 165,000. In recent times now you’re looking at over 200,000, so there is certainly plenty of growth that has come from inside the city center.

Paul: In the past three or four years, is that?

Nathaniel: Yeah, I’d say the past three or four years, that’s the sort of growth that we have experienced so I mean there’s still plenty of room for it to grow over the next few years, we’ve certainly watched what’s happening in Manchester, what we discussed earlier but I think there is still places, pockets inside Manchester that are quite not just there yet, so you’ve got places of regeneration for example, that’s happening within the city center. So places like, maybe where old warehouses, a bit of scrub land, etcetera. So that can be very, very good when it comes to the end of it, so we’re creating more places within the city center that’s going to be one of the prime places to live.

Paul: It’s almost a ripple effect from the center to the fringes.

Nathaniel: Yeah, exactly. I certainly would say that. As you sort of see over the next few years Manchester is going to keep on expanding, expanding out. You can see it currently taking place at the moment from Manchester city center going over to Sulfur Keys where, we mentioned before, where the BBC are set. The developments are taking place, there’s more infrastructure going in there, so it just keeps on growing and growing and growing and connecting to all these outside places. So again, the city center is seeing the most and it will continue to see the most, but there’s certainly pockets just outside of the city center that you will certainly see growth in.

Paul: I suppose, if you look at the past three or four years, you mentioned 150, 160 to now over 200, it’s probably a little bit difficult to see that continuing over the next two or three years, so perhaps those fringe areas are more likely to do better.

Nathaniel: Yeah, I mean, they will do very, very well, I’m not taking anything away from the city center, because I think in terms of where want to live they do like to live in the city center, they’ve got everything there, certainly there on the doorstep. And again, going back to the place where I live in New Castlefield, it’s an area within the city where you sort of walk out and it’s a bit more tranquil and it’s very, very nice. And for some people it’s all about different people’s perception and where they want to live etcetera. But yeah, no, certainly there is some areas within the city, just outside of the city, that again, they will see the most increases, because I said, they’re noting at the moment, if you know what I mean, there is certainly places within, around it, but …

Paul: I suppose you’re kind of buying a head of the curve there, aren’t you?

Nathaniel: Yeah, exactly, exactly. I mean quite a lot of people have said to me over the past few years, and invested in Manchester, and sort of seen the growth. It was, I feel like it was getting into an area of like London, for example, obviously you saw a lot, a lot of growth over the past few years and it’s sort of getting into London at the very, very early stages. So I say, you get into an area …

Paul: A good example of that is Hackney.

Nathaniel: Yeah.

Paul: Which is a really nice place now, but going back not so long ago, it perhaps wasn’t that nice but it’s experienced eight hundred and fifty percent growth over the past thirty years.

Nathaniel: Yeah.

Paul: Which is the fastest growing town in the UK.

Nathaniel: Yeah.

Paul: So that’s quite interesting, I think, at five miles from the city center in London and it has performed the best.

Nathaniel: Yeah, no, absolutely. I mean there’s certainly going to be areas, I won’t say eight hundred and fifty percent growth, I certainly would not say that, but again, I think you’ve certainly got areas, for example Sulfur Keys, in the east side of Manchester, you’ve got, for example, where Manchester City’s Football Ground is, the Etihad Stadium, that area five, six, seven years ago, before the Commonwealth Games came and Manchester City took over the stadium, it wasn’t the area such you mentioned like Hackney, maybe, but it’s again the money that’s been pumped into that area, it’s just getting bigger and bigger and better and better. There’s more facilities and amenities, and it’s becoming a nice place to live. So again, that’s sort of proving the expansion of city over to the east side of Manchester, again to the south side, all around Manchester.

Paul: I suppose the affordability pushes those things out as well, doesn’t it?

Nathaniel: Yeah.

Paul: And people who potentially could have afforded to live in city previously now perhaps can’t and will move slightly farther out as the prices continue to increase.

Nathaniel: Yeah, absolutely. There’s things that cater that for all budgets in Manchester, there certainly is. I mean I mentioned before the house price for the city center and what a one bedroom apartment would go for there, but again, you can go to these outskirt towns, on which are just outside, again going back to the Metrolink, they’re very accessible into the city center. They’re very, very nice places to live in themselves anyway, and has everything that a person that lives there would need, but again they’re more affordable. I think it’s important that there are places that are in [inaudible 00:17:52]there but they will certainly see growth over the next few years.

Paul: Another interesting driver in Manchester seems to be the post graduate retention.

Nathaniel: Yeah.

Paul: Obviously, there’s always been good universities there, but people seem to be staying now.

Nathaniel: Yeah, so certainly we are seeing a lot of students at the two universities, Manchester and obviously Sulfur University as well, are staying here, are staying in Manchester. The jobs have been created for them and the infrastructure, in terms of the offices that are coming, the new companies that are coming into Manchester, companies that are already there that can offer them jobs that they go to study for, which I think is very, very important. Sometimes for certain jobs, you go to university, you still go to a place but you do have to move to a certain city because that’s where the jobs are for you, but [inaudible 00:18:41] the jobs are being created for them to stay in the city. Again, it’s not just the UK students that come to universities in Manchester, we know from developers that we speak to, it’s the whole world, they’re renowned all over the world for students to come in and do they’re studies here and get their job for employment here as well. Again, it’s making very, very good sounds for somebody who is looking to invest in Manchester.

Paul: Yeah that does seem to be a really positive thing that actually not just going there for university, but then after university you’ve got bright young minds driving the city, a lower average age, and that seems to be driving the center of city, especially. And that I suppose young people want to live nice and close to the facilities and amenities now, don’t they?

Nathaniel: Absolutely. Absolutely. And I think in terms of the jobs they’re coming here for, it’s professional jobs and that’s what we’re providing for them. Again going back to the developments that’s sort of tenets clientele that you’re going to be getting inside of the city center.

Paul: Okay, so when looking at Manchester, what would you say is likely to happen to the Manchester property market over the next five to ten years?

Nathaniel: I think in terms of the developments that are being built at the moment, some of them aren’t completed, some of them are completed, and I say you’ve got completion set for three or four years to come and more and more developments are going to be taking place there. You’ve certainly got more jobs coming to the area, I mean, the airport expansion for one, which I touched on in the first part of the show, I mean that’s not going to be until around 2030, so again that’s what we mentioned in terms of helping the economy in Manchester, it’s not happened yet, it’s going to be coming in 2030. The HS2 line that’s going to be, again that’s going to be 2028 maybe going to 2030 as well. Again the signs are very, very good, very, very strong for the growth in terms of Manchester. [crosstalk 00:20:41]

Paul: It seems quite a lot is happening in about ten years from now actually being delivered to the Manchester market.

Nathaniel: Exactly.

Paul: So you probably expect quite a strong build up.

Nathaniel: Yeah.

Paul: To that point, somewhat similar to, I suppose, areas that have been impacted by crossrail in London.

Nathaniel: Yeah.

Paul: It’s not quite done yet, but there’s been a massive shift in pricing in a lot of areas.

Nathaniel: Yeah, absolutely. I mean going back to the point, of Manchester is a fantastic city. Obviously I live there, I love living there, etcetera. It’s got everything that you need there at the moment, but again it’s sort of going through a bit of a regeneration of such. It’s not that it’s not good now, but it can be so much better. [crosstalk 00:21:19]

Paul: Well I suppose when you’re cutting the travel time from Manchester to London in half, that has to have a positive impact, doesn’t it?

Nathaniel: No, absolutely. Absolutely, yeah. I mean I travel down from Manchester today to come down for the show. Two hour, ten minute it took me and it’s going to be cut down to just over an hour and eight minutes, so again it’s just making Manchester accessible to the UK and again with the airport expansion to the whole world. I mean again, the airport is the UK’s busiest airport outside of Manchester, which again people can fly in to do the business, etcetera. It’s going to have a huge impact, as I say, it’s not there yet, so there’s essential plenty of time for it to come into .

Paul: Okay, so if we summarize, the fastest growing city in the UK, increased transport links, lots of infrastructure, lots of positive development happening, seems like a really great opportunity.

Nathaniel: Absolutely, absolutely. And as I say before, it’s not only just the UK’s fastest growing, in Europe. So yeah, certainly, certainly a fantastic place to invest in.

Paul: Okay, thanks very much Nathaniel.

Nathaniel: Thank you, Paul.

Paul: Unfortunately, that’s all we have time for now. Join me Paul Mahoney on Proper Wealth to discuss all aspects of wealth creation, including property.

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