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England’s Manchester Proves Popular With Gulf Coast Property Investors

While London is still the top spot for Middle Eastern buyers, the North West city is increasingly being seen as a safe bet

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Manchester, England

Alberto Manuel Urosa Toledano/Getty Images
Manchester, England
Alberto Manuel Urosa Toledano/Getty Images

The city of Manchester in North West England is becoming an increasingly popular hotspot for Gulf Coast property investors, according to a report Wednesday from Select Property Group.

The city is now the second most attractive investment location in the U.K. behind London for buyers from countries like Kuwait, Saudi Arabia, Oman, Qatar and the U.A.E.

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Of the Gulf Coast-based investors surveyed by the property investment company, 13% said they would choose to invest in property in Manchester as opposed to any other U.K. city.

Though more than half of the respondents (54%) said they would invest in London, the demand for real estate in the capital is declining, with low yields and falling price growth prompting buyers to look further afield to regional cities, the report said.

"London can no longer offer the levels of growth it once did 10 to 20 years ago," said Adam Price, managing director of Select Property Group, in the report. "Prices are reaching an affordability ceiling and, when coupled with slow yield growth, makes property in the capital an increasingly difficult investment to justify."

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But with low supply and strong growth forecasts, Manchester presents a good opportunity for investors to enter the market as the city enters a period of economic development, Mr. Price said.

Looking ahead, residential sales prices in Manchester are projected to rise 81% faster than the U.K. average by 2022, while rental prices are forecast to grow 40% faster than the national average.

Outside of Manchester and London, Liverpool was the next most popular investment city (5%), followed by Oxford and Cambridge (3% each).