“So many secondary cities are lurching into oversupply, with developers responding to demand from investorbuyers rather than the renters that actually drive the market.”
Withers admits that demand remains strong in Manchester, despite property investment specialists like himself saying it had peaked some time ago.
But he adds: “Something has to give: 6,963 units are currently under way in Manchester. At a time of downgraded growth forecasts and political uncertainty, that feels precarious.”
Focus for investors will remain in the North, though, according to Withers.
“What is likely is that dominant hotspots in the country (including Manchester, Liverpool, Birmingham, even London) cede ground to less well-known but equally promising and enterprising regional areas.
“Such places benefit from low entry points, an availability of strategically located development sites, weak competition from existing rented stock and the promise of catch-up growth.
“Of course, they must always exhibit the classic market drivers as well: an uptick in jobs and population and new regeneration or infrastructure projects.”
Four Yorkshire areas – Halifax, Wakefield, Bradford and Doncaster are tipped for success by Withers.
Halifax is enjoying a “once-in-a-lifetime regeneration funding” and has plenty of young professionals working in the area, says Withers.
Bradford has the youngest population in the UK and one of the fastest-improving universities in the country.
It has also had nearly £1billion of investment in public spaces, shops and historic sites and is the first Unesco City of Film. Wakefield benefits from “various overlapping enterprise zones”, he says, with the local economy “going at an enviable clip”. And Doncaster is becoming the UK’s logistical hub, which has boosted employment there and demand for rental accommodation.
This continued focus on northern towns is largely thanks to the Government’s Northern Powerhouse investment, prompting Chancellor of the Exchequer Philip Hammond to say: “If the Northern Powerhouse were a country, it would be among the biggest economies in Europe.”
A Northern Cultural Regeneration Fund to provide £15million for tech, creative and cultural sectors is also behind the Great Exhibition of the North, which will take place in Gateshead and Newcastle from June to September.
“This £15m fund is a fantastic chance for towns and cities to develop inspirational projects that could have a transformative local effect – particularly in communities that have seen less cultural or creative investment in the past,” Culture Secretary Karen Bradley said earlier this year.
“We want as many people as possible to benefit from the Great Exhibition of the North and this fund will boost the Northern Powerhouse and help build a lasting legacy across the whole region.”
Withers concludes: “Next year is going to be an interesting one for property investment. Investors are facing a less bountiful environment, with plentiful low-risk returns in emerging markets drying up to an extent. What remains is a harder investment environment but one that is potentially more rewarding. It is likely to be a year where fortune favours the brave.”