Cardiff Investment Guide | Vesta Property Buy-to-let

Cardiff Investment Guide

Cardiff is one of the UK’s fastest-growing economies in the UK, offering world-class universities and sporting facilities and a growing property market to cater for an expanding population.

Why Cardiff?

A global sporting reputation and growing population

Cardiff is one of the UK’s fastest-growing economies in the UK, offering a growing connected business community, an active and innovative media sector, houses world-class universities and sporting facilities and a lifestyle that ranks amongst the best in Europe.

Extensive regeneration following decline in the70s and 80s has resulted in investment of both public and private sector money, is driving the city forward turning it into a modern European hub.

House prices predicted to rise by 20 percent over the next five years

Wales' has developed a strong reputation for staging annual sporting spectacles, which has changed the perception of a country which may have once been perceived as a bit of an outpost. More recently, the city hosted the Champions League Final projecting the city in front of an estimated 200 million people in 180 countries.

Key Insight

ECONOMIC GROWTH

5.7%

Cardiff’s GVA is growing at a faster rate than the other UK Core Cities

DEMOGRAPHICS

96% working age

1.5 million population, within the capital region - due to grow by 20% by 2035

STUDENTS

65,000 students

Attend world-class universties with growth in 2017/18 exceding national average (5.8% v 2.5%)

TALENT

57%

Of the workforce in Cardiff is qualified to degree level (NVQ4+)

CONNECTED

98%

One of the most connected UK cities with 98% of homes and businesses having access to superfast broadband

The City

Cardiff has a thriving city centre, with great shopping centred on Queen Street and the newly developed St. David’s Centre.

More recently, Cardiff has cemented itself as a leading city to watch international major sporting events, attracting global audiences.

In 2014 Cardiff was crowned European Capital for Sport

The 74,000-seater Principality Stadium (previously known as the Millennium Stadium) which is the home of Welsh Rugby union and hosts a number of major sporting events and music concerts. Cardiff is popular for football too, with Cardiff City’s home ground, replacing Ninian Park located in Leckwith.

Economy

Wales’ economy generally lags behind much of the UK, whereas Cardiff as a city, has a strong economy. In recent years the economy has topped the economic growth of the capital cities in the UK, including London (BBC / ONS 2017).  

The construction of the Cardiff Bay Barrage in the Nineties was the catalyst for the £2 billion regeneration that turned the waterfront into a go-to destination. As Wales earned a reputation for its welcome and ability to stage major memorable football cup finals, the Welsh Government began to heavily focus on the market in event tourism.

The Cardiff Capital Region (CCR) City Deal was a £1.2 billion investment deal agreed in 2016 between the UK and Welsh Government. The programme aims to bring about significant economic growth in the region and leverage an additional £4 billion of private sector investment.

One major project set to benefit from the City Deal is the Metro Central transport hub, which is being expanded in order to prepare for the millions of new passengers projected to use rail links in Wales over the next 25 years.

The city is a thriving business hub supporting a growing number of companies in sectors like health, education, biotechnology, ICT, financial and business services and creative media industries (InvestinUK).

The local economy is also benefiting from the abolishment of the tolls on the Severn Bridge in 2017, which is attracting a new demographic and opening up the Welsh countryside to tourism. The railway line regeneration to Bristol in 2020 is anticipated to make Cardiff more accessible to business travellers and tourists, which could have a positive impact on the property market also.

Population & Students

Population growth in the city is expected to be over 20 percent by 2035

The city population is 357,200, while the greater metropolitan area has 1.1 million residents.

Population growth in the city is expected to be over 20 percent by 2035. A high proportion are expected to be younger citizens, including 75,000 students, one-third of whom are post-graduates.

Home to a range of exceptional world-class universities, Cardiff has become a hotspot for students, with a student population of more than 65,000 making up almost 12% of the city’s entire population. Cardiff University has around 32,000, the University of South Wales has around 22,800 and Cardiff Metropolitan University has just over 10,000.

Cardiff had the strongest annual student growth rate in the UK, increasing by 5.80% in the 2017/18 academic year, compared to the national average of 2.55% and was named the most affordable university city by the 2017 Student Living Index.

Businesses in the city report that it is easy to attract and retain skilled staff and that the availability of local talent is helping to drive growth.

Business

Most entrepreneurial regional city

A report published by the Lloyds Bank National Business Awards in 2018 named Cardiff as one of the UK’s top five cities for business growth, in particular in respect of so-called gazelle companies which have more than doubled their revenues over a four-year period (Devonalds).

Wales boasts an impressive 250 companies employing more than 15,000 workers in the pharmaceuticals, bioscience and medical device industry. This bioscience cluster is flourishing with strong links between Cardiff University and private sector companies in the locality.

The Cardiff pharmaceutical industry is estimated to register GVA growth of an impressive 6.75% per year, which is the same as that of the UK.

The financial and business services sector accounts for more than 5% of Welsh GDP. Cardiff also houses many internationally financial services companies such as Lloyds, HSBC, TSB, GE and GMAC.

In addition, local companies such as Julian Hodge Bank, The Admiral Group, Thomas Carroll and The Principality Building Society have been hugely successful and have grown significantly over the past few years.

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Property

As property prices and economic growth suffer in other parts of the UK, Wales is thriving, with house prices predicted to rise by 20 percent over the next five years. In September 2018, the average cost of a home in Wales reached an all-time high of £184,722 (Devonalds), Cardiff is £209,800, compared with ­London’s £482,200 (Telegraph)

Zoopla’s ­index of house prices across UK cities puts Cardiff’s growth at 3.9 per cent in the year to May, the ninth highest in the UK. This is in contrast to ­neighbouring Bristol, which recorded 2.1 per cent.

The east side of Cardiff – the M4 corridor – is already benefiting from the toll-free travel between England and Wales.

There are lots of development initiatives ongoing or planned. Adjacent to Cardiff Central railway station is Central Square, a huge new quarter that will include HMRC’s new Wales headquarters, the new Foster + Partners-designed home for BBC Wales, and Cardiff University’s new School of Journalism.

Cardiff has seen lots of purpose-built student blocks built in more recent years, as well as areas around Cathays, Roath, Adamsdown, Splott, Heath and Plasnewydd attract students with those areas being within a 10 – 20-minute walk from the different campus’. According to a report in 2017 by Cushman & Wakefield the student-to-bed ratio in Cardiff was 2.5:1; higher than the national average, demonstrating that demand for student property developments in Cardiff remains high.

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This report was written in October 2019 and is based on evidence and data available to Vesta Global Ltd at the time. It uses certain data available then and reflects views of market sentiment at that time. Any forecasts or projections of future performance are inherently uncertain and liable to different outcomes or changes caused by circumstances whether of a political, economic, social or property market nature.

Please contact Vesta for sources.

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All information contained in this website is provided as a guideline only, is based on estimates and assumptions, may not be accurate or complete, and is subject to change. We make no representations or warranties with regards to this information, expressed or otherwise. A buyer who relies on such information does so at their own risk. Buyers are advised to seek independent financial advice and should undertake their own due diligence.

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