With property values increasing significantly in Northern England, experts are predicting that the gap between house prices in the North and South is expected to narrow over the coming years.
According to Savills, house prices across Britain are expected increase by 14.8% between 2019 and 2023, adding roughly £32,000 to the average property price, giving an average home value of £248,000 by the end of 2023.
However in the South East, while still having expectations of growth lags far behind the rest of the UK in their predictions. While house prices in London are expected to rise by 4.5% between 2019 and 2023, outside the capital could see growth in the double figures. House prices in the North-West are predicted to rise 21.6%, Scotland 18.2% and Wales could see an increase of 19.3%.
Is There Still Room for Growth in London?
Historically, London has driven the UK housing market, having seen house prices skyrocket by 72% of the past 10 years, a growth that is far beyond the growth in any other region of the country. The affordability ratio for the average home in London means that an average first time buyer would need to spend 13 times their salary to afford a home.
And with investors shaken by the possible implications of Brexit, investment in the capital has dipped. The culmination of affordability issues combined with less investment is very much putting the brakes on the high levels of growth previously seen in London.
While house prices are still expected to rise, the figures are very much more in line with increases in cost of living and wage growth.
Northern House Price Growth Forecasts
However, the report shows that outside of London, key regional economies including Manchester and Birmingham still have a lot of room for growth.
The comparatively affordable pricing, combined with strong economic output means that they are still attractive to both local purchasers and those wishing to invest.
Based on figures from Nationwide’s House Price Index, if Savills projections for growth are correct, by the end of 2023 average house prices will look like the table below:
Matt Lavin of Benoit Properties states “For investors, the attraction of the North is that, while there
is a great opportunity for capital growth, entry rates on properties in key city areas with great rental
demand are still affordable.”
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