According to a recent industry forecast by Oxford Economics, over the next half a decade, UK house prices outside of London are predicted to increase by somewhere in the region of 15-20%. This would add around £30k to the average UK house price by the time 2023 comes around, taking that average cost of buying a home in Britain (not including London) to almost £250k.
The same forecast also states that house prices across the UK are no longer being driven by happenings in the capital, which is the opposite of what has happened in the preceding decade. In the 10 years that have passed since the 2009 credit crunch, London property prices have risen on average by an impressive 72%, which is in stark contrast to the measly 1.9% that has been seen in the North of England.
Manchester property boom?
There are a number of factors at work behind this promising prediction for the North of England and they relate to a predicted growth in wages, a potential rise in interest rates and an increase in property transactions. The forecast also points to a particular area of the North of England performing especially well, with Manchester – an area that is continuing to attract young investors and buyer’s – and other areas in the North West expected to experience significant gains.
How much? Well, Oxford Economics predicts a price rise in excess of 20% in the next 5 years – a figure that is sure to be viewed extremely favourably by those looking to invest.
Midlands also strong
Birmingham, Britain’s second city, is also proving particularly popular with home-seekers, as is Humberside, Yorkshire and parts of Wales and Scotland. Despite the current uncertainty in the UK, growth in these areas is predicted to be quite strong and whilst the gains might not be quite to the level in the North West, they’re still likely to be in double digits.
Contrast in the Capital
Homeowners in London have had things pretty good over the last decade when it comes to house prices, but the projection for the next 5 years isn’t quite as rosy as it has been. Londoners need not panic just yet, however, as an increase has still been forecasted, but at a very modest 5% over the next half a decade.
This is due in no small part to the mess that is Brexit and the instability that has pervaded across the British Isles and with much larger sums of money spent in London (the average price being some £430k)compared with the rest of the UK, it is perhaps no surprise that a lack of market confidence is felt most keenly and prolonged in this part of the country.
However, it’s not all doom and gloom in London, as the figures in the aforementioned forecasts only relate to the prices of existing or second-hand properties. New-build properties, the kind of which that are springing up across the capital, are expected to increase by as much as 15% in the same period.
There’s also good news with regards to the most exclusive, high-priced properties in London, as they would seem to be unaffected by Brexit uncertainty. The reason for this is that buyers of the most prestigious properties tend to purchase using cash and as such, are immune from regulations pertaining to mortgages. Regardless of the outcome of Brexit, London will always be a popular place to live and the richest among us will always like to live there. Properties of this type are also expected to increase between 12-15%.
Whichever way it is viewed, it’s clear that Britain’s exit from the European Union has not gone to plan – something that’s immediately evidenced by the fact that the Summer of 2019 is approaching and the UK is still under the governance of Brussels. October the 31st is the next deadline for Brexit, meaning that its shadow will still be cast over the UK property market for at least a few months longer.
It would indeed seem that the North of England does represent the best opportunity to make a profit when talking about investing in 2nd hand properties and over the course of the next 5 years and it does look likely to outstrip price rises in London. However, when new build properties are taken into account, it soon becomes evident that there are still excellent opportunities for savvy property investors in the capital too, regardless of the UK’s EU or non-EU status.
So, rather than having to write off London as a no-go area for investment for the next few years, those looking for opportunities should still be able to find them. It just so happens that London is no longer the only place in Britain where growth is strong.