From a growth perspective, overall, the UK market grew 1.8% over the last year. However, this is not uniform across the UK, with many areas bucking the trend and continuing to see much stronger growth.
According to the latest UK Cities House Price Index from Zoopla, Liverpool saw a 5% growth in the past year. With Nottingham and Leicester both at 4.5%, growth is predominantly focused in the central and north of the UK, as well as further afield in Belfast (4.6%).
In comparison, it is the southern regions that are suffering most with prices dropping by 0.5% in Cambridge and 0.4% in London, as well as rising by just 0.5% in Oxford. This is by no means a surprise as these are some of the most expensive cities to live in in the UK. As affordability dynamics continue to shift, property purchase has become increasingly out of reach for many first-time buyers in these locations.
The Continued Rise of Manchester
Major investment into the key cities and towns of the Northern Powerhouse have seen a substantial improvement in the quality of life in these locations with a knock-on effect on property prices.
At the centre of it all, the UK’s “second city” of Manchester has welcomed a major boost to the property market thanks to the creation of thousands of new jobs. This development has seen new graduates choose to stay in the city as opposed to heading down to London or back to their hometowns to find work; it has also seen a rise in new movers to the city who have recognised its vast and growing potential for career prospects and progression.
New research shows that new job creation in Manchester is outpacing all other regional centres across the UK, with the number of office workers in the city expected to grow 10,000 between 2018 and 2021. The city is also experiencing its highest wage growth since 2008. This marks a move further and further away from London as the traditional epicentre for the job market. With salaries now becoming more competitive away from the capital, we can expect to see a continued positive impact on the property market from a regional official, residential and industrial property perspective.
This is coupled with the fact that Manchester welcomed the greatest volume of inward investment deals in 2018 outside of London. This is creating a stronger business hub with new and dedicated business districts, fuelling even more demand from job seekers.
Manchester at large offers an exceptionally good quality of life, which makes it far more attractive to many than the high prices and crowds of London. Property investment in 2019 continues to grow in the face of Brexit concerns, as record-high job creation levels translate to positive growth across the property markets at large.
Opening up the Northern Regions
As we consider the property investment market update from another perspective, there are great strides being made in Manchester’s residential property arena. As an increasing number of older people join ‘Generation Rent’ due to the flexibility renting affords, a new dimension has been created for the rental property market and buy-to-let landlord who have traditionally dealt with students and younger people.
There is typically far more excess capital available to more mature tenants, and this has only served to push demand up even further and create an even more diverse and lucrative rental property market.
With Manchester outperforming most UK cities in many regards, we can reasonably expect to see this growth pattern mimicked across other northern locations, as property investors capitalise on a fast-moving market and growing demand fuelled by major regeneration projects and the new opportunities associated with such growth.
Recent research shows that businesses overwhelming support the HS2 rail link and Northern Powerhouse Rail. These infrastructure projects will mean northern locations will soon be able to cast a far wider net when it comes to commuter towns and villages, as key locations become much more easily accessible and rental property more highly sought-after. This is set to provide another major boost to the property markets.
To conclude our property investment market update, we are continuing to see property price growth; however, it is essential to note that there is plenty of regional variation. When it comes to property investment in 2019, the stories of the northern and southern regions are worlds apart.
First-time-buyers are limited in many southern regions due to slow price growth and price drops with a fairly bleak outlook and barriers that may be hard to break down anytime soon due to inflation and challenging market fundamentals. While cheaper mortgage rates may do their bit to make property purchase slightly more affordable, a lot needs to be done to break the overall cycle.
In contrast, cities such as Manchester are being bolstered by record levels of job creation and the northern regions, in general, are enjoying far more growth and projected success than the southern cities. Key locations including Manchester and Liverpool are predicted to continue to enjoy above-average property price growth throughout the rest of 2019 and beyond thanks to strong earnings growth and a flourishing job market. For advice and support with property investment 2019, contact our specialist team at Alesco via email at [email protected] or give us a call on 0203 819 7366.