Historically, the property market in the South has surpassed all other regions in terms of house prices, yields and return on investment, but in 2019 the tables could turn as investor focus shifts further north. The success of the property market in the South has long been driven by the UK’s capital and nearby towns, and has provided both landlords and investors alike with a ‘fertile hunting ground’.
UK property investment specialists Hopwood House take a look at the changes on the horizon as the line begins to blur between the property markets in the north and south.
With property prices stagnating in London paired with house values in northern England, the Midlands and Wales forecast to skyrocket, investors are now choosing to focus their attention on the lucrative opportunities that can be taken advantage of in the north.
House prices in the North set to significantly exceed those in the South
The North West region is set to experience the fastest and strongest growth in house prices, increasing by more than 21 percent over a five year period, followed by Yorkshire and Humberside achieving a 20 percent increase, the East and West Midlands at 19 percent and the North East seeing a respectful 17.6 percent increase in property prices.
In comparison, London is expected to see another year of price falls in 2019 with property prices in South East and East regions remaining largely unchanged. Even prime central London, which has been forecasted a mere 12 percent increase in house prices, fares poorly compared to the 14.8 percent expected increase in house prices across the UK as a whole.
A booming property market in the North
A recent buy-to-let investment report took a look at the current yields and annual returns within the private rented sector within the UK, and the statistics are extremely encouraging for investors choosing to funnel their cash into developments and properties further north.
The report found that unsurprisingly, the North West offered the strongest rental yields at 6.2 percent, closely followed by Yorkshire and Humber with yields of up to 6 percent. Buy to let investors can expect to enjoy some of the greatest annual returns in the North West (11.7 percent) and the East Midland (11.2 percent), proving that seriously lucrative investment opportunities can be found outside the capital and its surrounding affluent areas.
The demand for properties in the North and Midlands also continues to grow, with the strongest demand for rented accommodation and modern houses in cities such as Liverpool, Manchester and Birmingham which are home to some of the UK’s top ranked universities and have had significant investment in their infrastructure in recent years. In comparison, demand for such property in London has cooled off due to continued high prices that the younger generation simply can’t justify.
With the Northern region expected to witness a notable increase in house prices within the next few years, capital gains alone will attract property investors and when paired with a continued demand for property in the North driven by students and young professionals as well as strong rental yields, competition amongst investors to snap up property in the North will increase.
Long term forecasts such as this however must be treated with extreme caution, especially considering that Brexit angst is a major factor for market sentiment right now and particularly in the housing market, as things can change suddenly, and have done so before.
Hopwood House are specialists in property investment, with a wide range of buy-to-let properties for sale throughout the UK including Manchester, Liverpool, Birmingham and Sheffield .