Demand for city centre living is at an all-time high. Across the UK, the population of many town and city centres have doubled in size with residents flocking to enjoy the amenities, easy commutes and ambience of living a city lifestyle.
And it’s not just in the UK. Research undertaken by the National Bureau of Economic Research showed that a reversal of the trend for professionals to move out to the suburbs in well underway in the USA, and across the globe.
For investors wishing to benefit from a stable investment which is almost void proof, purchasing in a prime city location can be extremely attractive.
The demand for city lets
City-dwellers very much tend to be young, single professionals. In the UK, the majority of those who live in the centre of large cities (those with 550,000 or more), tripled in the first decade of this millennium to the point where they made up half of the population.
Three quarters of these young, professional residents rent, giving a great opportunity for those investors who wish to have an asset with steady rental revenue.
The rise of city living as a lifestyle choice among the young is very much attributed to the scarcity of leisure time, and a changing demographic who wish to make the very most of time spent outside of work – not on long commutes. In the UK, increasing travel prices have also seen a move towards living nearer work locations, with higher rental levels a payoff against high fares.
A spotlight on the North
The Centre for Cities has mapped city centre population growth across the UK – and a clear picture has emerged. The data, which mapped the growth of city centres of populations over 135,000 between the years 2002 – 2015 showed a clear distinction between population growth as a percentage.
The largest city centre population growth was in Liverpool at 181% with Manchester, Sheffield and Leeds not far behind at a respective 149%, 150% and 139% growth.
While in terms of sheer volume, London has the most city dwellers, in terms of growth, it lags far behind at just 22%.
The appeal of city centre investments
The almost constant undersupply of rental properties in city centres is one of the major attractions for investors. City centre locations are attractive to investors for the same reasons that they attract tenants; great transport links, investment in infrastructure and good job opportunities.
City centre property often has the benefit of driving gains in a fairly short time, commanding high rental prices and generally quick capital growth. Additionally, city centre locations are generally established markets where predictions can be fairly straightforward.
For some, the higher costs associated with the purchase of city centre property may be discouraging, and they may seek instead to take advantage of investing in commuter towns.
However, for those who can afford it, taking advantage of the ever-increasing demand in prime city locations offers a great opportunity to add a valuable asset to their portfolio.