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Brand new IMF report reveals good news for UK economy as regeneration efforts continue across regional markets

January 22, 2014Article by Ray Withers

The International Monetary Fund (IMF) released its new report yesterday (Tuesday 21st January 2014) and it’s looking like good news for UK investment. The IMF expects the economy to grow 2.4% in 2014, which is faster than any other major European economy and a gain on the previous prediction of 1.9%.

The prediction for 2015 is currently 2.2%, although some experts believe the later forecast will be higher; and the Treasury says the forecasts are evidence the government’s plans to improve the economy are working, despite previous concerns from the IMF that the austerity drive may restrict growth.

Global growth rises out of “low gear”

The global growth outlook has also been raised to 3.7%, with the IMF commenting: “Global growth is expected to increase in 2014 after having been stuck in a low gear in 2013.” The euro area as a whole is predicted to grow by just 1% and even the world’s largest economy, the US, only hits a forecast of 2.8% for 2014. However, China remains in the top league at a significant 7.5% this year.

So does this mean the UK economy is out of the woods? Not quite, but it is certainly heading in the right direction. Shadow chancellor Ed Balls comments: “After three damaging years of flatlining, any growth is welcome and long overdue.”

Rising confidence in UK economy as financial system slowly heals

Certainly, confidence in the UK economy has notably increased in recent weeks, with unemployment falling, the manufacturing sector and retail sales recording strong growth and inflation back at the 2% target rate.

Olivier Blanchard, chief economist and director of research at IMF, explains: “The basic reason behind the stronger recovery is that the brakes to the recovery are progressively being loosened. The drag from fiscal consolidation is diminishing. The financial system is slowly healing.”

With economic confidence comes increased spend and this includes regeneration budgets and this looks particularly prevalent for the north and midlands over the coming years.

Billions in regeneration create regional hotspots for investment

UK Chancellor George Osborne’s autumn 2013 statement has already revealed £1 billion in funding will be unlocked to boost housing across the country, particularly in the north, over a six year programme. Areas thus far include Leeds, Manchester, Liverpool and Bradford.

In particular, Liverpool was recently named as a top buy-to-let location in the Daily Telegraph and a £1.5 billion regeneration drive in Bradford has boosted Bradford’s popularity to make the city one of the UK’s top residential hotspots for 2014.

Ray Withers, CEO of Property Frontiers, comments: “This new report from IMF adds confidence to the already optimistic market for UK property investment in 2014. This year certainly looks like ‘the’ year to invest in the hotspot cities, especially those set to receive the government grants and regeneration efforts.”

He continues: “The five year forecasts for both price growth and the private rented sectors are also looking good and an increasing number of investors are looking towards regional areas to deliver greater returns than the capital. We’ve been watching Liverpool and Bradford for a while now and now it looks like the industry has caught up. We advise you to add these locations to your portfolio while they are hot and before they sell out.”

Get in touch on +44 1865 202 700 to find out more about our hotspot investments, including a prestigious development in Liverpool guaranteeing yields of 8.5% (gross) for investments from £82,500; and luxury city centre apartments in Bradford delivering returns of 9% on investments from just £50,000 and offering 50% developer finance.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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