• Family staycations to jump from 29% to 37% in 2017 (Travelzoo)
• Inbound visitor numbers hit record levels in Nov 2016, up 17% in 1 year (ONS)
• Blended UK holiday homes and investments set to benefit from Brexit (Properties of the World)

The UK’s tourism industry is looking forward to a bumper summer this year, if current trends continue to play out.

According to Travelzoo, 37% of Brits plan to take their main holiday in the UK in 2017, compared with 29% in 2016. Pre-Brexit wobbles and an austere budget are no doubt playing their part in families’ plans, but it’s not just cautious Brits who are choosing to spend their leisure time in the UK.

The country is also proving an attractive destination to overseas visitors. Figures from the Office for National Statistics (ONS) show a trend of increasing inbound visitors over the course of late 2016.

Visits by overseas residents to the UK increased by 1.5% in July to September 2016, when compared with the same quarter of 2016. November then saw a record-breaking month for inbound tourism, with numbers leaping by 17% compared with November 2015 and spending up by 14%, at 3.1 million visits and £1.7 billion respectively.

“The charms of the UK as a holiday destination have never been greater. For UK-based families, it’s a chance to take a break without the hassle of long-haul travel, luggage restrictions and bumper flight prices over the summer holidays. For those from overseas, the UK represents great value for money – something which the triggering of Article 50 may well boost further.”

Jean Liggett, CEO of visionary property investment consultancy Properties of the World

It’s not just short-term circumstance that is causing families to look to the UK. Adventurous investors are looking at the country’s longer-term potential, with investments like Afan Valley Adventure Resort in South Wales bringing a new dynamic to family breaks.

Investment at the resort is from £149,000 for lodges and luxury villas, with returns of 8% NET for 7 years. Families who invest can enjoy 2 weeks’ personal use of their investment property each year – ideal for those looking to enjoy one of the most breath-taking areas of the UK during their summer break.

There will be a kaleidoscope of adrenalin-fuelled and health and wellbeing activities at the resort. These will range from fabulous spa facilities to more active pursuits, including a water challenge, high jungle rope zip-lining, parachuting and a host of challenges to test teamwork and stamina. The resort promises an action-packed adventure for the whole family and is the ideal way to enjoy the best of the British countryside.

With so much to do on-site, and the ease with which Wales can be accessed, the appeal of such blended holiday and investment destinations is clear. A holiday home for the whole family that’s also a hands-off investment can provide regular income without the usual hassle of cleaning, repairs and garden maintenance that a fully owned holiday home brings with it.

Afan Valley also offers a lower cost investment option. Land plots are available for £25,000, with a mark-up of 10% per annum for three years and an assured buy-back of 125%. They are ideally suited for families looking to take on a smaller investment, or to spread their investment portfolio across a wide range of assets.

“Resorts like Afan Valley are ideal for adventurous families looking to enjoy the best of the UK, from its scenery to its property investment opportunities. With Brexit about to become reality, UK investments with outstanding lifestyle benefits such as this one are well positioned for a rise in popularity.”

Jean Liggett, CEO, Properties of the World

For more information, visit www.propertiesoftheworld.co.uk or call +44 (0)20 7624 5555.

• New UK buy-to-let tax changes come into effect from 6^th April 2017
• 44% considering alternative real estate sectors in 2017 (PwC)
• Student housing, leisure and healthcare sectors emerge victorious (PwC)

It’s fair to say that the UK’s buy-to-let property market has suffered quite a few blows at the hands of government in recent years.

The additional 3% Stamp Duty from April 2016 meant that buy-to-let produced lower yields literally overnight and the scaling back of mortgage interest tax relief from 6^th April 2017 is also expected to have an impact. Then there’s the whole Brexit issue, which has created a lingering aura of caution and uncertainty when it comes to the property market (though the market has held up well thus far).

“The UK buy-to-let market has displayed an impressive level of resilience in the face of these blows. Investors haven’t lost their despite the tax changes and impact of the Brexit referendum. What has been particularly interesting, though, is the scope that the situation has provided for other asset classes to flourish – care home opportunities and even exciting new adventure resorts are all tempting investors looking for strong returns, which many buy-to-let properties can no longer match.”

Jean Liggett, CEO of visionary property investment consultancy Properties of the World

PwC’s Emerging Trends in Real Estate Europe 2017 report confirms this. According to the report, 44% of those surveyed are considering alternative real estate sectors in 2017, with ‘alternatives’ boasting the best prospects as the year unfolds.

Healthcare and leisure are cited as two of those alternatives, as is student housing. In fact, “student housing, retirement/assisted living and healthcare” are listed as the three best 2017 real estate investment prospects.

Care homes are an interesting example. At Gramont House in Bingley, investors can enjoy 8% NET returns for 25 years as part of an investment model that has been developed as an ethical, sustainable way to meet the needs of the UK’s ageing population. Investors’ purchases make a difference to the standard of accommodation that can be offered to those in care, as part of a fully hands-off model. Investment is from £75,000, without so much as a hint of Stamp Duty to worry about.

Meanwhile, adventurous investors are turning to new tourism resorts to satisfy their need for healthy returns, as well as to enjoy the lifestyle benefits that such investments offer. The UK tourism sector is booming. The Q4 2016 Hotel Bulletin from AlixPartners projected that 20,000 new hotel bedrooms will open in the UK over the course of 2017. Meanwhile the Hotel Investment Outlook 2017 report from JLL confirms that Europe is expected to continue to show growth in 2017, despite economic uncertainties.

“The tourism industry has shown resilience and travel remains on the increase. The movement of international travellers is expected to grow 4% annually over the next 10 years, resulting in a lot of heads in beds.”

JLL

The long-term prospects of leisure sector investments have caught the attention of many investors who, before the tax changes, might otherwise have put their money into buy-to-let without a second thought.

Figures from the Office for National Statistics show that overseas residents made 9.2 million visits to the UK over the course of the three months to December 2016, an increase of 6% compared with the same period in 2015. North America and Europe drove the growth, increasing their visitor numbers by 15% and 8% respectively.

Developments such as the extensive Afan Valley Adventure Resort are benefitting from both the booming visitor numbers and the shift in investor attention. Land plots (£25,000) and lodges (from £149,000) are offering promising returns, while the lodges come with the lifestyle benefit of two weeks’ usage per year.

Student housing is perhaps the most established rival to buy-to-let in the UK when it comes to grabbing real estate investors’ attention. The model is proven to the point that PwC’s Emerging Trends in Real Estate Europe 2017 report noted that it had spread from the UK and Germany to Iberia, Central and Eastern European countries and the Nordics. 61% of those contributing to the report cited student housing as their preferred alternative investment for 2017.

Modern, stylish student accommodation schemes such as X1 – The Campus in Salford, Manchester show why the model has become so popular. Investors enjoy yields of circa 6-7% NET, students experience a standard of living that would have been unimaginable just a few years ago, and overcrowded university cities breathe a sigh of relief at the swift resolution of their accommodation struggles.

 “The UK remains a safe, stable investment prospect, but investors who are seeking maximum returns from real estate in 2017 are increasingly being drawn to alternatives for their stronger yields. Expect this trend to continue for several years as mortgage interest tax relief continues to be phased out.”

Jean Liggett, CEO, Properties of the World

For more information, visit www.propertiesoftheworld.co.uk or call +44 (0)20 7624 5555.

• “Buy cheap and buy smart” to lessen impact of tax changes (Properties of the World)
• 440,000 landlords could move up a tax bracket in April (National Landlord’s Association)
• Cash is king when it comes to beating new taxation rules (Properties of the World)

It’s fair to say that buy-to-let investors haven’t had the easiest time of it in recent years. With the government squeezing an increasing amount of tax out of them, the National Landlord’s Association has estimated that some 440,000 landlords will find themselves pushed up a tax bracket next month.

So, will the April tax changes finally ring the death knell for buy-to-let? Not according to industry experts…

“Yes, the taxation landscape for buy-to-let investors is becoming harsher, but there’s still plenty of profit to be made for those looking in the right places. Investors need to focus on buying to NET profits by seeking out developments with strong yields. The right properties can still produce healthy returns. Instead of the death of buy-to-let, we’re seeing the birth of buy-to-NET.”

Jean Liggett, CEO of visionary property investment consultancy Properties of the World

Landlords have already swallowed the 3% stamp duty land tax on second homes that was introduced in April 2016. Now, from April 2017, they’ll see the tax relief from their finance costs phased out, with the percentage of these costs deductible from rental income dropping by 25% per year until it reaches 0% in the 2020 to 2021 financial year.

The restricted finance costs include interest on mortgages, loans, and overdrafts, including borrowing used to buy furnishings, as well as to cover the purchase cost of the property. For those already in possession of one or more buy-to-let properties purchased on finance, the change means a gradual reduction in profitability over the coming four years.

So what can potential landlords do?

“The simple answer is to buy with cash and thus avoid the tax relief deductions entirely. However, that’s not always an ideal solution for some investors. For those still using mortgage or other finance to purchase a buy-to-let property, the best plan is to buy as if it’s 2021.

Calculate the property’s yield based on the end of the phasing in period in order to ensure that it will still be a profitable venture once the tax changes are fully implemented. Work out now whether the changes will push you up a tax bracket and make your investment decision with full knowledge of that fact.”

Jean Liggett, CEO, Properties of the World

There are certainly still plenty of options available to investors looking to avoid being stung by April’s taxation changes. Purchasing lower cost properties that are more achievable as cash purchases is one strategy.

At Victoria House in Liverpool, superb penthouse apartments are available from as little as £68,750. Such a purchase may well prove a better longer-term prospect than opting for an investment of double that value (or more), which would require borrowing.

Opting for a city flagged as a hotspot is another good approach. HSBC has identified Manchester as one of the UK’s top four buy-to-let hotspots, while Jones Lang LaSalle has projected that house prices there will rise by 4.5% per year for the next five years. Such strong figures can serve to offset reductions in tax relief for investors interested in properties there, such as the brand new development at Barrel Yard.

“Really it’s about going back to basics. Buy cheap and buy smart. Don’t be deterred by the spectre of increasing taxation – those who plan carefully should be able to minimise the impact of April’s tax changes and ensure they still buy to net a healthy profit.”

Jean Liggett, CEO, Properties of the World

For more information, visit www.propertiesoftheworld.co.uk or call +44 (0)20 7624 5555.

• Trade and investment top the priority list (Properties of the World)
• North/South divide showing strongly for goods and services (Centre for Cities)
• Liverpool and Manchester standing out from the crowd (Properties of the World)

Figures released only yesterday from Centre for Cities have highlighted the shape of the UK’s 63 biggest cities in the run-up to the triggering of Article 51.

The 2017 data reveals a clear divide between the North and the South, with goods being exported mainly from the North and services from the South. Centre for Cities has emphasised the relevance of trade and exports in the run-up to Brexit, while visionary property investment consultancy Properties of the World has stressed the importance of inward investment.

Jean Liggett, CEO of Properties of the World, comments,

“2017 is going to be a landmark year for the UK’s cities. Seven of them will be electing metro mayors in May, with the newly elected officials having to hit the ground running in terms of dealing with the fall-out from the government’s triggering of Article 51, which should take place by the end of March. Trade, exports and investment will require firm, decisive management in order for cities to thrive over the year ahead.”

Greater Manchester and Liverpool City Region are two of the cities that will be directly electing their own metro mayors in May. The devolved powers associated with the move means that the two cities should benefit from greater ability to respond swiftly to the changing environment post-Article 51. Their ability to place a local emphasis on their reactions should help them to weather the storm and ensure that their manufacturing and services sectors respond appropriately to shifts in focus and demand.

Centre for Cities’ finding that the North relies far more on goods for its exports, while the South relies on services, is also likely to have an impact on cities’ resilience in the face of Brexit.

It’s easier to move services overseas than it is to move manufacturing operations: moving services simply means setting up office space and relocating people, but moving manufacturing involves specialist premises, supply chain changes and import/export considerations, as well as moving staff. The result is that the UK’s goods-producing cities are less likely to see a sudden outflow of businesses during the Brexit process.

Both Manchester and Liverpool stand out from the crowd in terms of their ability to face Brexit head-on, according to Properties of the World. Not only will their metro mayors and reliance on the production of goods stand them in good stead, but the cities have unique attributes that should be of use. Properties of the World CEO Jean Liggett explains,

“Manchester and Liverpool both enjoy property-related factors that will help to see them through the choppy waters of the Brexit process. The latest Hometrack data shows that Manchester’s property prices grew at the second-highest rate in the UK during 2016, while Liverpool topped the table for growth rate over the past three months. These dynamic urban areas are perfectly positioned to lead the UK’s cities into Brexit and out the other side.”

The Hometrack UK Cities House Price Index reveals that Manchester’s property market is growing at the fastest rate for more than a decade. It is second only to Bristol in terms of its 2016 growth rate, and is widely believed to be ready to overtake it during Q1 2017. The 8.9% year on year rise in prices experienced in Manchester is a result of a significant lack of supply – something which all UK cities are struggling with thanks to urbanisation and a rise in popularity of city centre living.

Liverpool, with 21.57% of households renting privately (or living rent-free) according to Centre for Cities, is also enjoying a property market boom. Prices there rose by 3% over the last three months – the highest rate of any UK city analysed by Hometrack.

Factor in rent rises as well and it’s easy to see why both Liverpool and Manchester are key UK locations for property investment from overseas buyers (as well as from domestic investors). Rents rose by 1.2% in the North West over the past year, according to the Office for National Statistics, but regional variations within the area’s cities resulted in much higher rises in urban locations. According to Jones Lang LaSalle, rents in Manchester city centre rose by around 11% in 2016.

In Manchester, it is city centre apartments like those at Barrel Yard which are attracting considerable attention currently. The brand new development offers stylish apartments from £165,000 and smart townhouses from £240,000. Jones Lang LaSalle has projected that Manchester house prices will grow by 4.5% per year for the next five years, while HSBC has identified the city as one of the top four buy-to-let hotspots in the country, reporting rental yields of 7.6%.

In Liverpool city centre, the just-released penthouse apartments at Victoria House are attracting buyers looking for something a cut above the average. Completion is scheduled for Q4 2017, meaning that investors can look forward to enjoying rental returns of around 7-10% by the end of the year. Prices start from as little as £66,250.

For more information, visit www.propertiesoftheworld.co.uk or call +44 (0)20 7624 5555.

• Firm leadership and underlying solidity make the UK attractive to investors (Properties of the World)
• UK is 10^th most transparent country in world (Transparency International)
• London tops list of Cities of Opportunity (PwC)
• UK ranks 7^th for ease of doing business (World Bank)

Prime Minister Theresa May’s speech, outlining the UK’s intended Brexit process last week, gave sterling a significant boost against both the dollar and the euro.

A clear (well, clearer) path to Brexit and the PM’s firm stance have re-inspired many investors, and the UK has retained its reputation as a safe haven for international capital, particularly when viewed in a global context.

Jean Liggett, CEO of visionary property investment consultancy Properties of the World, comments,

“Political and economic stability aren’t guaranteed anywhere in this day and age, as some of the surprise events of 2016 have certainly emphasised. Yes, the UK has the issue of triggering Article 50 to deal with however, with firm leadership in place I believe that investors will appreciate the underlying solidity of the UK as an investment option.

“We offer a transparent business environment and a real estate market that is packed with potential, from ideally located buy-to-let investments to high-yielding second homes and innovative commercial investments.”

Tony Horrell, chief executive of Colliers UK and Ireland, shares Liggett’s confidence, stating,

“The UK remains one of the most transparent and active places to do business, and currency arbitrage by international investors is opening up opportunities for new and greater investment, which will no doubt help to drive the UK real estate market in 2017.”

International factors, such as Trump settling into his presidential role in the US, and the actions of Philippines President Rodrigo Duterte, could well play into the UK’s continuing reputation as a safe haven for investors in 2017.

So, too, could more positive international factors, such as the UK’s leading role in fighting global corruption, as demonstrated at the 2016 London Anti-Corruption Summit, and the country’s position at number 10 of the Transparency International Corruption Perceptions Index 2015. PwC’s Cities of Opportunity Index also flags up the UK’s potential, with London ranking at the very top of the list.

The World Bank Ease of Doing Business ranking adds further weight to the UK’s continuing position as an investment safe haven. The UK ranks 7th in the world for ease of doing business. Within Europe, only Norway and Denmark rank higher. The ranking means that while HSBC and UBS may be eyeing up France and Germany as potential locations to move some of the UK-based financial staff, they won’t find doing business there easier than they have been used to on British soil.

For investors, a transparent country where it’s easy to do business is an increasingly rare thing in such an uncertain world. Despite the Brexit process, the UK is holding its head high when it comes to attracting investment from both overseas and domestic investors. As Properties of the World’s Jean Liggett concludes,

“The UK remains a fundamentally sound country when it comes to investment, particularly property investment. Companies with an eye on the future are working closely with those overseas – we have a member of the team in Hong Kong right now, for example – in order to build a long-term future where investment continues to flow across borders. As PM May also stated at the World Economic Forum in Davos last week, the UK will be a “world leader” on trade and we believe a prime target for investors looking to bricks and mortar with excellent returns.”

For more information, visit www.propertiesoftheworld.co.uk or call +44 (0)20 7624 5555.

• Just 3% of potential tapped from Chinese property investors (CBRE)
• New Chinatown tipped to be particularly attractive to Chinese buyers (Properties of the World)
• North West to achieve higher than average property price gains in 2017 (RICS)

Not content with being home to the UK’s oldest Chinatown, Liverpool is now gearing up to be home to the country’s newest Chinatown as well. Billed as a ‘city within a city,’ the £200m new district will embody the spirit and dynamism of both the Northern Powerhouse initiative and contemporary China.

Jean Liggett, CEO of visionary property investment consultancy Properties of the World, believes that the 850 homes of New Chinatown will attract keen interest from investors in China. She comments,

“The impending Chinese New Year and Golden Week are a key time for Chinese property investors . With a whole week off for Golden Week, it’s an ideal time for buyers to scour the planet for enticing investment opportunities and Liverpool’s New Chinatown has all the elements needed to be a big hit.”

Chinese interest in Liverpool encompasses everything from its businesses and football team to its bricks and mortar. The UK’s political and economic stability (despite the Brexit vote) makes it a key location for Chinese investors. Liverpool is one of the cities being actively promoted by Chancellor Philip Hammond and was included in the Northern Powerhouse portfolio presented to China’s vice-premier Ma Kai when he visited the UK in November 2016.

For Chinese investors looking for UK buy-to-let properties, New Chinatown ticks all the boxes. The one, two and three bedroom apartments, duplexes and townhouses are priced from £121,095, with 7% NET assured returns for two years. The outstanding blend of traditional and modern Chinese architecture is creating a district unlike any other in the UK, with newly launched apartments already selling fast.

“2017 looks set to be a key year for Chinese investment in the UK,” explains Properties of the World’s Jean Liggett. “China is such a vast market and interest in UK property is increasing with each passing year. Projects like New Chinatown, where construction is well underway, are particularly attractive as their looming completion dates mean that buy-to-let investors can already see their end goal. Of course, New Chinatown also stands out due to its architectural inspiration!”

Liggett’s projections are backed up by those of CBRE’s Victor Li, who estimates that just 3% of potential investors in overseas property have so far been found in China. He comments,

“I think it is just beginning. You do the figures: China has a population of 1.4 billion. If you target only 1% of China’s population, that’s 14 million people.”

Add to that the fact that RICS is projecting average property value increases of 3% in 2017, and highlighted the North West as a region likely to record higher than average gains, and 2017 looks set to be a good year for Chinese investment in the UK indeed!

For more information, visit www.propertiesoftheworld.co.uk or call +44 (0)20 7624 5555.