Experts predict a housing cost increase in the north of England
Against the backdrop of stagnation in the capital’s property market, investors are looking for new markets for investing. Experts recommend turning attention to the northern part of England. In their opinion, that is where the largest value increase is expected in the next 5 years. Other regions such as Midland, Wales and Scotland should not only outpace the capital, but also reverse the long-established real estate market trends from north towards south.
The highest growth rates are predicted in the North-West of England — 21.6%. There are slightly lower rates in Yorkshire and Humber (20.5%), East and West Midlands, Wales (19.3%), Scotland (18.2%) and the north-east of the country (17.6%).
Average UK housing prices in 2019-2023 years should grow by 14.8%. It will add up £32,000 above the old values and make total £248,086.
Projected growth in London is distinctly lower — at 4.5%. However, prime central London will look good value and rise by 12.4%. Price increase in the south-east and east of the country will also fall behind the average rates — at predicted 9.3%. The figures are higher in the south-west and reach 12.6%.
Lucian Cook, head of Savills’ UK Residential Research department, says: “The fear of Brexit is one of the main factors affecting the real estate market today. Especially when it comes to London. However, the current situation may be resulting from the global financial crisis. In the long run, the market will be shaped by the requirements for mortgage loans in combination with growing interest rates.”
The expert believes that stricter mortgage rules introduced in the aftermath of the 2008 crisis will both keep in check value increases and protect the market from collapse.
It is worth noting that the Nationwide Building Society reported the lowest value increase in the UK over the past five years. The expected figures for this year will not exceed 1%.
An unexpected alternative
Some investors have already turned their attention to real estate outside the United Kingdom. According to the Real Estate Alliance, a real estate agency in Ireland, an increasing number of UK citizens prefer Irish property. The numbers have increased by 10% over the past year.
“11% of all inquiries are coming from British customers and 6% of sales are goes to the Irish property market. In the past year there were at least five transactions of this kind per a real estate agent, which is 10% more than last year,» — the REA representative Barry McDonald said.
According to REA research, the most popular reason for buying property in Ireland (27% of respondents) is to secure a residence for retirement there. 11% of customers want to change a lifestyle, 8% would like to get a place for vacation.
It is interesting that the most requests — almost 40% — come from London or the south-east of England. At the same time, British buyers demonstrate rather modest price expectations. 20% of purchases come in the range of €250,000 — 300,000 and 22% — in the range of €300,000 — 500,000.
The average housing price in Ireland is € 234,824. Nevertheless, it is too early to assume that the interest of the UK customers may affect the value growth. Compared to the overall sales figures, their number is still small. However, the uprising trend indicates such a possibility in the future.
