A recent study into house price predictions over the next five years has revealed that the average house price in the UK is expected to rise by 15 percent, and that by 2023, the average property will cost £248,000 (a whopping £32,000 more than the current cost of a UK property).
It’s great news for you Northerners, as you could experience a house price growth of more than 20% in the next 5 years. However, Londoners may not be so fortunate with property prices in the coming years, as the research suggests that the UK property market could see a huge shift in investor focus, so much so that major cities such as Liverpool and Manchester could steal the capital’s title as the UK’s property hotspot.
The North-South Divide
London has long been at the heart of UK property investment, and has attracted both international and local investors and landlords alike. But the high entry costs demanded alongside increasingly attractive opportunities elsewhere in the UK has prompted investors to set their sights further north.
In wake of the financial crisis, London property prices soared and continued to do so for almost a decade, whilst in comparison house prices in the North rose by a mere 1.9 percent in the last 10 years.
However, the five year forecast disclosed that these stable trends will not continue in the coming years. The research, which is based on predicted wage growth, rise in interest rates and transaction numbers, revealed that the most significant house price growth is expected to be seen throughout the North West region, where major UK cities continue to attract young business professionals and investors.
The Midlands can also expect to benefit from increased mortgage borrowing rates in the next few years, which will subsequently result in a strong double-digit price growth across house prices in the region.
In comparison to the attractive house price growth expected to be seen throughout the North West, London house prices are set to rise by only 4.5 percent by 2023.
Brexit negotiations have impacted all UK markets, the property market more so than any other. Rising pressures and uncertainties have troubled landlords and investors alike, however both London and other UK regions are expected to see an upsurge in interest and market activity in the coming years.
Gradually rising interest rates paired with new mortgage regulations are set to completely revolutionise the UK property market and redefine the role of investors across the country.
Despite the grim picture that has been painted thus far regarding the future of the London commercial property market, the capital’s prime market, which is compromised of some of London’s most luxurious and expensive properties, is expected to see a growth in property price of up to 12.4 percent. Buyers focusing their attention towards the higher price bracket are more likely to pay cash for a property, and will therefore not be affected by mortgage regulation.
Whether you choose to expand your property portfolio in London, the Midlands or further North, now could be the perfect time to invest. Alternativley, if you’re looking to make the most of a stable and increasingly popular market, then it could be the ideal time to enter onto the property market.
Hopwood House are property investment specialists, with a large portfolio of investment properties for sale in all major towns and cities throughout the UK including Manchester, Birmingham and Liverpool.