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House prices in the UK are expected to rise by almost 15 per cent over the next five years, adding £32,000 to the price of the average home by 2023, according to a new property market forecast. The average property will cost £248,000 by 2023, said Savills, the estate agent who carried out the research. However, Londoners used to living life in the fast lane should get used to a slower pace with house price growth no longer driven by the capital's property market, in a reversal of the trend seen over the past decade. Over the past 10 years since the financial crisis, house prices rose by 72 per cent in London.
By comparison they rose just 1.9 per cent in the North and 5.8 per cent in Scotland. The Midlands - driven by the increasing popularity of Birmingham; Yorkshire and Humberside; Scotland and Wales all also have the capacity for mortgage borrowing to increase relative to incomes and so are expected to experience strong double-digit price growth. Conversely, London, where the average house price is now £429,000, will see prices rise only 4.5 per cent in the next five years. With buyers forking out such huge sums, it is no wonder that Brexit-related anxiety is most keenly felt in the capital, and likely to remain so for longest.
However, London’s prime market, comprising its most expensive properties, is expected to see a stronger upswing in the years to 2023, with 12.4 per cent price growth predicted for pricey central London properties. Savills said this was because high-end buyers are more likely to be paying cash and so are unaffected by mortgage regulation. In recent years these buyers have been put off by increased property taxation at the top of the market and, more recently, by Brexit uncertainty. However, the estate agent expects London to remain a popular place to live and work after Britain leaves the EU, and thus a well-regarded place to own high-end property. The Savills research only looked at second-hand property prices. A separate report from housing market forecaster predicted a 14.3 rise in the price of new-build properties in Greater London over the next five years, with an upswing expected almost immediately after Brexit.
Birmingham dates back to Anglo-Saxon times, but remained a modest, medium-sized town for much of its history. Around three centuries ago, however, Birmingham thrived amidst the Midlands Enlightenment followed by the Industrial Revolution and quickly turned into a major city of international importance. Today, it is the UK's second biggest and second most populated city, behind only London. It is home to more than a million people (3.7 million in its metropolitan area), including tens of thousands of resident students during university term times. Five universities call the city of Birmingham home: the University of Birmingham is the largest, followed by Birmingham City University in a not-too-distant second place. University College Birmingham, Aston University and Newman University also collectively contribute well over 20,000 students to the city's undergraduate and postgraduate population, which is the largest in Britain outside the capital.
It's more than just sheer number of universities that serves to attract so many young people to study in Birmingham. The quality of education on offer is also an important factor, securing the city as one of the UK's leading study destinations. The Times Higher Education awarded the University of Birmingham the title "University of the Year" in 2014, and various university rankings have placed it in the UK's top ten. While not as prestigiously-ranked as its neighbour, Birmingham City University attracts nearly as many students and numbers are growing with every intake thanks to its innovative approach to teaching and five Centres of Research Excellence.
Student numbers across the UK have been growing for some years now, and have fully recovered from the dip that they took after tuition fears were almost tripled a few years ago. As the site of the UK's biggest non-London student population, Birmingham has faced a particular rush of new students each time September rolls around. As a cosmopolitan and multi-cultural city, it has also been well-placed to benefit from the recent [https://www.ziprecruiter.com/c/Greystar-Property-Management/Job/Leasing-Professional-�-Greene-Crossing/-in-Columbia,SC increase] in the number of international students choosing the UK as a country of study. Across most major UK markets, this has led to a dearth of accommodation, particularly high-quality, purpose-built student housing. Student heads outnumber student beds by a significant margin, and the high levels of demand this creates are especially evident in Birmingham. Major reports such as Savills' "Spotlight on Student Property" have highlighted the strong prospects that student [https://gspropertygroup.co.uk/landlord/ property investment in Birmingham] offers. With a large, undersupplied student market and especially strong demand for property that will offer comfortable living standards, investors who pick up good-quality properties can find tenants relatively easily and reap strong rental returns.
For those considering whether now is the moment to buy, these are disorienting times. When Kate Faulkner recently looked for a home in the city of Peterborough — a growing location for London commuters — she found comparable properties within one square mile whose prices were going up, down or were completely flat. "There are as many different markets in one city as there are across the country," said the founder of Property Checklists, a website and advice provider. With price growth slowing in former hotspots, transaction levels stuttering and an uncertain period for Britain’s economy in prospect, the housing market has been drawing in its horns. Buy-to-let investors are hemmed in by new taxes and regulations, while owner-occupiers are reconsidering high-risk property moves as interest rates start to rise and mortgage affordability rules remain tight.
This week, Bank of England governor Mark Carney delivered a stunning warning that house prices could be 35 per cent lower than would otherwise be the case three years after a disruptive "no-deal Brexit". Some, however, believe today’s uncertain market offers precisely the conditions in which canny purchasers can find opportunities to strike a property bargain. After experts tackled the issues on stage at the FT Weekend Festival last weekend, FT Money assesses the outlook for anyone thinking of pushing the boat out on a home purchase. Is property still a good investment? A housing cycle is under way across the UK, said Richard Donnell, director of housing market analyst Hometrack, told a packed marquee of FT Money readers at the festival.
But depending on where you are in the UK, it could either be coming to an end or it is just getting going. While growth is powering ahead in cities such as Manchester and Liverpool, it is flagging or going into reverse in places like Aberdeen and parts of London, according to Hometrack’s latest prognostications. There are other parts of the UK that are still to see the ripple effects of formerly stratospheric growth in London and the Southeast — a trend that stalled roughly three years ago. ] than they were 10 years ago," said Mr Donnell, with Oxford, Cambridge and Bristol among them.
The decidedly mixed picture he set out is reflected by lacklustre levels of activity in the housing market. But some of those sellers are not yet willing to acknowledge that a material change in sentiment has taken place. One indicator of this is the gap between asking and selling prices, which stands at 10 per cent in central London, said Mr Donnell. In Manchester and Birmingham it has narrowed to about 2.5 per cent. "In London we’re on a journey of price discovery. ] is about finding the people who are serious about selling, who are happy to take that haircut on price to get on with their life. Among asset classes, housing often carries a strong emotional connection for its owner-occupiers — a connection that few would ascribe to the equity funds sitting in their Isa.
