Some of the most interesting property investments are currently to be found in the North of England. Jay Patel, relationship director at Wellesley, explains why…
“WE LIKE the North,” says Jay Patel, relationship director at Wellesley. “It’s a nice part of the world – and investment-wise and homeowner-wise there’s a strong market there which serves a very real need.”
It has been three years since the government launched its Northern Powerhouse initiative, aimed at driving new investment and transport links into the ‘core cities’ of Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle. Already the region is reaping the benefits of new investment from the public and private sectors.
“We’re seeing an influx of larger firms,” says Patel. “And there’s investment from various different firms to move personnel up to the northern part of the UK and by virtue of that you’re creating a larger number of professional jobs, a larger number of higher-paying jobs to incentivise the market.
“What’s more, there are some great universities in the north of the country and there are now more people willing to stay in those university towns after graduation. So, you’re getting and retaining a higher percentage of professional staff. Those people are obviously needing places to live, be that by renting or purchasing and it’s feeding through to the property market.”
According to the latest house price data, property values in the North East and North West are rapidly outpacing price growth in London and the South East, and Patel expects this trend to continue, even after Brexit.
So why aren’t more property lenders looking towards the North?
“It’s banking 101,” says Patel. “You invest in what you know. So, if you’re based in London, you lend to areas around London.
“We were probably a little ahead of the curve and that’s why we have a Manchester-based individual who’s purely focused on Manchester and the northern parts of the UK. But I’d imagine that competition will start heating up soon.”
Wellesley has had a head start when it comes to investing in property in the Northern Powerhouse. The property lender has already built strong relationships with a number of well-known, high-quality developers in Manchester and beyond, who have undergone rigorous vetting processes.
“What we typically look at is the quality of the borrower, so their experience, their reputation, their financial standing and the team they have around them,” explains Patel. “The ability to go out and see some of their previous projects first hand is always quite key – it’s the little things you can see from walking around a site that you can’t tell from a photo.
“We are very hands on – we go out and see sites, we go out and see our clients’ previous projects as well as ongoing projects that we’re funding, just to create a fuller picture of how they’re operating.”
Last year, Wellesley provided £39.9m in funding to Manchester based developer McGoff for the construction of an apartment complex on the River Irwell. The project is now nine months ahead of schedule, and more than 90 per cent of the apartments have already been sold. Patel sees this as a triumph of his team’s focus on logistics and relationship building.
“Experience is key,” says Patel. “We have the experience in the Northern Powerhouse, and we intend to remain there.”
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