INVESTORS EYE HIGH RETURNS IN CITIES SUCH AS EDINBURGH AND MANCHESTER
THE UK property market may be cooling off, but it is still offering hot opportunities for smart investors.
According to the latest report from Halifax, prices dropped by 3.1 per cent, or an average of £7,140, in April. That’s the second-largest monthly fall since the lender began its index in 1983.
Falls have been sharpest in London, with the southeast also bearing the brunt of lower price trends. In addition, values have fallen in the southwest of England for the first time since 2013.
However, despite the gloomy headlines, the outlook for investors remains positive. For one thing, prices are typically 2.2 per cent higher than they were this time last year. And, according to some estimates, they are set to rise over the next 12 months by up to three per cent.
There are also significant regional variations. Within London, there are property hotspots such as Barking, Dagenham, Bexley and Havering, recording more than four per cent growth.
Around the UK, the large regional cities like Birmingham, Manchester, Coventry and Edinburgh are experiencing property booms.
Then there are sectors that are expected to continue to offer substantial returns, such as retirement homes, commercial property and holiday lets, not to mention price-cut hotspots where buyers are being tempted by favourable discounts.
Alan Collett, of Hearthstone Investments, said: “Despite the gloomy headlines on property prices, the outlook for investment remains strong. There are plenty of opportunities despite the cooling market.”
According to most analysts, many of the major hotspots for growth in the residential market currently lie outside London. The latest index from HomeTrack, which analysed 20 cities around the UK, suggests investors looking for the best locations for capital growth in the residential property market should target the major regional cities. It says the “scarcity” of property in such places is supporting higher than average capital returns.
According to HomeTrack, prices in Edinburgh rose by 8.1 per cent in the year to March 2018, followed by Nottingham (eight per cent) and Manchester (7.4 per cent). This compares to growth in London over the same period at just 1.6 per cent.
The HomeTrack report states: “In cities where house price growth is above average, new supply is broadly in line with sales. The ratio of sales to new supply is around one to 1.1 times in Manchester, Birmingham, Edinburgh and Glasgow. This creates scarcity and, together with attractive affordability levels, supports above average capital growth.”
House prices in Manchester, recently named by Deloitte as one of the fastest growing cities in Europe, are forecast to rise by 28.2 per cent between 2017 and 2021. The only area in the UK set to match it is Birmingham, while rental growth for the same period is forecast to reach a healthy 20.5 per cent.
The figure for Manchester is partly based on the fact that its population is rising 15 times faster than the rate at which new homes are being delivered.
Real-estate expert Simon Bedford said: “We’ve reached the point where Manchester should be judged by different criteria from other UK regional cities. Manchester is now in a different league, genuinely competing with other European and international cities.”
While London properties are traditionally the most expensive in the country, one district in the borough of Haringey has seemingly broken the mould. The less-than-average prices compared to the rest of the capital, together with a major regeneration programme, means Tottenham Hale has been dubbed one of the UK’s investment hotspots.
The area boasts one-bedroom properties for the relatively low price of £300,000, compared to an average for the capital of £429,372. It also offers a favourable location, just minutes away from central London via public transport.
“Tottenham is definitely one to watch,” said Mark Stephen, founder and managing director of Reditum Capital. “With the £1 billion regeneration scheme and the new £400 million Tottenham Hotspurs Stadium, Tottenham is enjoying a welcome transformation. The increased expenditure in this formerly overlooked part of London is set to bring new character to the area and with that, a great new opportunity for investment.”
The cooling of the property market has sparked speculation as to whether the UK is witnessing the beginning of a prolonged period of value depreciation or whether it is a temporary blip. Accordingly, some would-be purchasers may hold fire on the basis they could pay even less at a later date, while others may decide now is really a good time to buy.
One new piece of research has pointed to another factor coming into play. Analyst InvestorSquare suggests there are likely to be major opportunities thrown up by the exit from the market of Russian investors in the wake of the Salisbury spy poisoning affair. Its study points out that prominent Russian figures with links to Vladimir Putin own well over £1 billion worth of British properties.
These are located mainly in London and Surrey, but also in places like Birmingham. In 2013 alone, rich Russians headed the list of foreign purchasers of London homes worth £1m or more, accounting for more than £500m of sales. By early 2014, nearly one 10th of all property transactions in the capital involved Russian buyers.
InvestorSquare founder Ross Kelly says: “Significantly the UK has announced a review of 700 visas granted to wealthy Russians who were given permission to come to the UK before 2015 under the investor visa scheme. Russians are also significant investors in ongoing property developments across the UK. For example, our report reveals a private Russian buyer acquired the City Edge student accommodation block in Birmingham from Shaylor Holdings for £10.6m in March.
“Their potential withdrawal from these investments is both a threat to some much-needed developments and an opportunity for UK and other non-Russian investors to pick up on these investment prospects... there may be significant opportunities to snap up some unexpected properties at lower than usual prices, from Hyde Park stores and Kensington mansions to Birmingham student flats. It is an ill Cold War wind that blows no one any good.”
For those looking to snap up possible bargains in the capital, data from property website Zoopla shows London’s price-cut hotspots – as measured by the proportion of homes on the market carrying a “reduced” tag – are Twickenham, Mitcham, Croydon and Harrow. In cash terms, the biggest falls in price have been in the most expensive areas such as Chelsea, Westminster and Kensington, where they rose fastest during the boom years.
For those looking to invest in non-residential property, the care homes sector has traditionally been a favoured option. However, the last year has seen a dramatic rise in the number of private care homes businesses going under – from 81 in 2016/17 to 148 in 2017/18, according to the accountancy firm Moore Stephens.
The Competition and Markets Authority (CMA) has pointed to a £1bn shortfall in government funding of residential care in 2017. At the same time, the cost of care provision, with a typical establishment spending over half of its turnover on wages, has shot up after a substantial increase in the National Living Wage, now £7.83.
Professor Martin Green, chief executive of Care England, said: “Care homes should be benefiting from the demographics of the UK, an ageing population. But they are not.”
One sector subject to the same demographic advantages but not facing the same financial pressures is retirement homes. This is because they are not targeted at people with complex medical needs, but at elderly people wishing to release equity from their property or spend their golden years with similar individuals. Some just want to downsize while others seek a sheltered environment. Retirement homes are usually self funding, less labour intensive than care homes and not subject to the same financial pressures. For such reasons they may constitute an ideal investment environment, offering good returns and long-term sustainability due to the UK’s increasingly ageing population.
Research carried out by Legal & General found an estimated 3.3 million people in the UK are looking to downsize, while just 7,000 retirement homes are built each year to accommodate them.
Recognising the undersupply of retirement homes, Legal & General last year acquired an existing UK operator and £40m of assets. But it is not just large corporations that are attracted to retirement homes. Companies like One Touch Property have been successfully tailoring opportunities in the direction of individual investors, claiming an annual return of 10 per cent over a 10-year commercial lease for investment ‘suites’ that can be leased back to the developer for a fee and then operated by an experienced management company. These are classed as commercial property, and, as many of the suites are under £150,000, they are exempt from stamp duty charges.
Many buy-to-let landlords have been under strain over the past two years, due to the loss of tax reliefs, stamp duty rises and a tougher mortgage regime. Sarah Davidson of investment platform PropertyPartner said: “In October, landlords with four or more mortgaged properties became subject to further affordability checks by lenders when they remortgaged one property or applied for a new loan. Rather than the numbers having to stack up for that one property, landlords now have to submit figures for all properties in their portfolio before lenders can approve a loan. Taken together, this has put considerable financial pressure on landlords, many of whom have simply thrown the towel in.”
Others have been revising their portfolios to include commercial and semi-commercial properties. According to respected financial website This Is Money, one of the hottest sectors to emerge in recent years is the commercial sector. Some analysts have dubbed it ‘the new buy-to-let’ as yields can be higher than in residential projects. The market is divided into major commercial developments like shopping centres, industrial units and large office buildings, and micro commercial units such as convenience stores, food outlets and garages.
It is the micro-sector of the commercial property market that is growing in popularity with traditional buy-to-let landlords as returns tend to be higher because there are more income streams. Shops, for example, usually have flats upstairs, meaning two rental incomes.
Davidson added: “Commercial properties are higher risk, hence the higher rents, because they rely not only on a tenant paying each month, but also on the profitability of the business they run in order to generate that rent.
“But for those who are prepared to do their homework and treat their investments as a business, the changes have been something of a catalyst for restructuring portfolios to make them more profitable.”
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, is expected to meet US President Donald Trump and the Emir of Qatar in Doha on Wednesday, according to sources familiar with the matter.
The meeting is seen as part of Reliance’s continued efforts to engage with influential global leaders. Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), has previously invested in multiple Reliance ventures, while Ambani also maintains key partnerships with major US tech companies such as Google and Meta.
Ambani is likely to attend a formal state dinner hosted at Lusail Palace in Trump’s honour, sources said. However, no official business or investment discussions are expected to take place during the dinner.
A second source confirmed that a London-based, Indian-origin business figure with strong ties to both the Trump and Qatari leaderships will also attend the event. The individual has not been publicly identified.
Ambani’s detailed itinerary in Doha remains undisclosed, and Reliance Industries has not commented on the reports.
The visit comes shortly after Qatari Emir Sheikh Tamim bin Hamad Al-Thani’s trip to India in February, during which Qatar announced plans to invest $10 billion in various Indian sectors.
Following his visit to Qatar, Trump is expected to travel to the United Arab Emirates on Thursday. According to reports, his UAE trip will focus primarily on investment discussions, rather than regional security matters.
Ambani, Asia’s richest individual, continues to expand Reliance’s global presence through high-profile engagements and strategic partnerships, reinforcing the company’s global ambitions.
INDIA’s cabinet has approved a new semiconductor plant by HCL Group and Taiwan’s Foxconn, information minister Ashwini Vaishnaw said on Wednesday. The joint venture project is worth approximately £326.3 million.
The plant will be set up near the upcoming Jewar airport in Uttar Pradesh and is designed to have a capacity of 20,000 wafers per month. It will be able to produce 36 million display driver chips, Vaishnaw said at a cabinet briefing in New Delhi.
He said the plant is the sixth to be approved under the India Semiconductor Mission and that commercial production is expected to begin in 2027.
Prime minister Narendra Modi has made chip manufacturing a key part of India’s strategy to increase its role in global electronics production. India currently does not have an operational chipmaking facility.
Earlier in the month, Reuters reported that the Adani Group paused its discussions with Israel’s Tower Semiconductor for a proposed chip project worth around £75.2 billion, following an internal review over concerns related to commercial demand.
The Maharashtra state government had earlier announced approval for the Adani-Tower project in September. That project was expected to produce 80,000 wafers per month and create 5,000 jobs.
In 2023, Foxconn’s planned joint venture with Vedanta, valued at about £14.7 billion, was cancelled. The government had raised concerns over rising project costs and delays in approving incentives.
Other semiconductor projects are still progressing. These include a chip manufacturing and testing plant by the Tata Group worth about £8.3 billion, and a chip packaging facility by US-based Micron valued at approximately £2 billion.
(With inputs from Reuters)
Keep ReadingShow less
The job reductions will take place over the next two years
Luxury fashion brand Burberry has announced plans to cut around 1,700 jobs globally—equivalent to nearly one-fifth of its workforce—as part of a major cost-saving initiative aimed at improving profitability and streamlining operations.
The job reductions will take place over the next two years, with the majority of the affected roles based in offices around the world. Burberry’s UK headquarters is expected to see the greatest impact due to its larger number of employees. Some retail staff will also be affected, with changes to shift patterns being introduced to better align staffing levels with periods of peak consumer demand.
As part of the restructuring, Burberry will also eliminate the night shift at its Castleford factory in West Yorkshire, which specialises in manufacturing the brand’s iconic trench coats. The move is expected to result in the loss of around 150 jobs—roughly 25 per cent of the workforce at that facility. Trench coats produced at the site typically retail for between £1,000 and £10,000.
Chief executive Joshua Schulman said the decision followed a long-standing issue of overcapacity at the Castleford site. “For a long time we have had overcapacity at that facility, and that is simply not sustainable,” he said. However, Schulman insisted that the changes were being made to preserve the company’s UK manufacturing base.
“I want to be very clear that we are making this change to safeguard our UK manufacturing, and in fact we will be making a significant investment to renovate this factory in the second half,” he added. “Our intention is that we make our British heritage raincoats in the UK for many generations to come.”
The Castleford factory makes Burberry’s trench coatsGetty
Burberry, which employed approximately 9,170 people globally last year, said the workforce reduction represents around 18.5 per cent of its total employees. The cuts come in the wake of the company’s £40 million cost-cutting programme announced in November, following a slump that led to a full-year pre-tax loss.
On Wednesday, Burberry announced its intention to generate an additional £60 million in savings by the end of the 2027 financial year, bringing the overall target to £100 million. A portion of these savings will come from reducing “people-related costs,” especially in the UK, where teams including design and creative staff are based.
The company’s financial performance has been adversely affected by a decline in global demand for luxury goods, particularly in Asia. In addition, concerns have grown over the impact of higher tariffs in the United States, one of Burberry’s key markets.
For the financial year ending 29 March, Burberry reported a pre-tax loss of £66 million, a sharp contrast to the £383 million profit it posted the previous year. Comparable retail sales dropped by 12 per cent year-on-year, with a 16 per cent decline in Asia significantly contributing to the overall downturn.
Despite the losses, Burberry noted that trading improved in the second half of the financial year compared to the first, a sign the company believes indicates its long-term strategy is beginning to take effect.
Burberry’s outerwear segment—featuring staple products such as trench coats and scarves—continued to perform better than other categories, including leather goods and accessories. The brand has pledged to ramp up its marketing efforts to support core product lines. Recent campaigns have included well-known actors such as Olivia Colman and Barry Keoghan in a bid to reinvigorate consumer interest.
Burberry has unveiled plans to axe nearly a fifth of its global workforceGetty
Investor sentiment appeared to rally following the announcement of the cost-saving plans. Shares in Burberry rose nearly 10 per cent on Wednesday, with investors optimistic that the restructuring will help the company return to profitability.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the brand was facing tough conditions in the mid-range luxury segment. “Burberry is dealing with difficult conditions in the mid-market luxury sector. It doesn’t have the same pull of its ultra-luxe rivals, and aspirational shoppers are more cautious without the deep pockets of wealth to keep them insulated,” she said.
Streeter also noted that although some of the more severe US tariffs have been eased, a broader recovery in China’s consumer confidence—a key market for luxury brands—will take time. “Consumer confidence in China, which has been the powerhouse for luxury brands, will take time to be restored, which could also slow down Burberry’s progress,” she added.
With its workforce restructuring, targeted marketing, and strategic investment in UK manufacturing, Burberry is hoping to stabilise its operations and better position itself amid a challenging global economic landscape.
THE International Monetary Fund (IMF) has transferred the second payment of $1.023 billion (about £804 million) to Pakistan under its Extended Fund Facility programme, Pakistan's central bank announced on Wednesday (14).
This payment coincides with the start of virtual discussions between the IMF and Pakistani officials about the country's upcoming budget on June 2. The IMF delegation postponed their visit to Islamabad due to regional security concerns but is now expected to arrive this weekend if conditions permit.
The talks, which began virtually on Wednesday, will continue until Friday (16). The IMF has appointed Iva Petrova, a Bulgarian economist with a PhD from Michigan State University, as the new Mission Chief to Pakistan. She will work alongside outgoing chief Nathan Porter during this transition period.
The IMF board approved the funds last week after expressing satisfaction with Pakistan's economic reform progress. The package includes an additional arrangement for the $1.4bn (about £1.1bn) Resilience and Sustainability Facility.
"Pakistan's policy efforts under the Extended Fund Facility have already delivered significant progress in stabilising the economy and rebuilding confidence, despite a challenging global environment," the IMF noted in its assessment.
The IMF highlighted Pakistan's strong fiscal performance, with a primary surplus of two per cent of gross domestic product achieved in the first half of the 2025 financial year. This keeps the country on track to meet its target of 2.1 per cent by the end of the financial year.
Pakistan's foreign reserves stood at $10.3bn (£8.1bn) at the end of April, up from $9.4bn (£7.4bn) in August 2024.
These reserves are projected to reach $13.9bn (£10.9bn) by the end of June 2025 and continue growing over the medium term.
For the upcoming budget, the IMF has asked Pakistan to maintain tight fiscal policy, targeting a primary budget surplus of 1.6 per cent of GDP. This will require generating approximately £5.6bn beyond non-interest expenses.
The tax target for Pakistan's Federal Board of Revenue is proposed at 11 per cent of GDP, or £40.5bn. The overall budget deficit target is projected at 5.1 per cent of GDP or £19bn.
(PTI)
Keep ReadingShow less
The Blue Light Card scheme currently has over four million members in the UK
Asda has confirmed it will end its partnership with the Blue Light Card scheme later this month, bringing an end to a five-year discount initiative for emergency workers, NHS staff, social care employees, and members of the armed forces.
The supermarket, which joined the scheme during the Covid-19 pandemic to support frontline workers, is currently the only major UK grocery retailer participating in the programme. The partnership will officially conclude on 27 May 2025.
According to a statement published on Asda’s website, Blue Light Card members will no longer be able to link their membership to their Asda Rewards account from 11am on 13 May 2025. For those who had already linked their cards, the discounts will remain valid until 11.59pm on 27 May 2025.
“Asda’s partnership with Blue Light Card is coming to an end on 27 May 2025,” the retailer stated. “From 13 May 2025 11am, Blue Light Card members will no longer be able to link their Blue Light Card Membership to their Asda Rewards Account. Any accounts linked before this date will continue to receive the exclusive member offer as detailed in the terms and conditions until 27 May 2025 11.59pm, at which point the offer will be removed.”
The discount scheme had offered reduced prices on a range of grocery items including fresh meat, cooked meat, fresh fish, fruit and vegetables, dairy products, bakery items, and fresh fruit juices and smoothies.
In a statement to The Independent, an Asda spokesperson said: “We launched our partnership with Blue Light Card during the pandemic to provide additional support for emergency workers and would like to thank them for the opportunity to work with them during the last five years.
“Our focus now is on providing all our customers with outstanding value every time they visit our stores or shop with us online.”
It is understood that the supermarket contacted affected customers on Tuesday to inform them of the decision. Those who had previously linked their Blue Light Card to their Asda Rewards account were notified of the scheme’s upcoming conclusion.
The Blue Light Card scheme currently has over four million members in the UK. It offers access to around 13,000 discounts across a variety of sectors, including travel, retail, and hospitality.