UK’s Northern Cities dominating Property Price Growth in the UK
Figures from the latest index show that cities within the north of the UK are continuing to dominate house price growth in Britain, with five northern cities registering house price growth of more than 7%. Many of the UK’s cities are registering strong growth, with figures showing that key cities recorded growth of 5.2% overall between February 2016 and February 2017. However, London appears to be taking a different direction, recording only a 1% growth, as well as the fact that almost half of the cities postcodes recorded negative growth.
Findings from the Index
In the UK, five northern cities all recorded property price growth of more than 7%, showing a dominance from the north that has rarely ever been seen. Birmingham (7.7%), Edinburgh (8%), Leicester (7.7%), Liverpool (7.8%) and Manchester (7.1%) were the top performing cities, all outperforming London by some stretch. Despite London registering such a low growth in comparison, the 20 cities covered within the index make a combined growth of 5.2%, which is an advance on the previous year, of which was 4%.
The index report says: ‘We expect the number of markets with falling house prices to grow further in the coming months as buyers accept lower prices to achieve sales. The net result will be a negative rate of headline price growth for London by the middle of 2018. The latest results confirm our view that house prices in London are set to drift lower in the next two to three years. In contrast, house price growth remains robust in the largest regional cities where similar analysis on rising and falling markets reveals no evidence of localised price falls.’
It was also found in the index that Belfast, Oxford and Southampton registered slight growth of 3.2%, 0.5% and 2.8% respectively, as well as highlights of the worst performers. Cambridge registered a negative growth of 1.5%, whilst Aberdeen was the worst performers out of the cities covered, with price growth down by 7.7%.
London Underperforming whilst the North is Thriving
London has registered a poor price growth, one that is outperformed by northern cities in every sense of the word. However, the underperformance of London is not one that is considered to be drastic, as the London property market often operates in cycles, and it is probable that it will recover during 2018 and go on to perform well again. Investors from across the globe still consider London to be the best UK-based property market to invest in, despite any political difficulties, and so the market is sure to recover at some point in the near future.
Whilst London is taking a backseat, northern cities are thriving, and offering an alternative to investors that is actually considered as a better option to London at present. With cheaper yet growing property price, and fantastic rental returns, northern cities are presenting investors with opportunities that they simply cannot pass up, and opportunities that cannot be found anywhere else in the UK at this current time. These northern cities are also experiencing large investment projects into the areas, developing them in such a way that continues to increase the desire for people to live there, increasing the demand for properties. This is only going to continue, and the northern cities are sure to flourish for many years to come.
For more information on buy-to-let investment or the UK property market, please contact Hopwood House.