The Rush to the Northern UK is On
Are you a home buyer or rental property investor perusing the UK housing market and wondering how you might get more home for your money?
As the 2020 recession has played out some new trends are becoming visible. The buyer migration trend is seen in both the UK and US housing markets. More home buyers and rental property investors are headed to the suburbs villages outside of London. The same is happening in the Northern England region.
Although there’s a surge in Covid 19 cases that’s quietening the northern landscape this week, the Corona Virus hasn’t dampened the housing market in Northern England and Scotland this year. This is definitely a place for rental property investors wanting lower prices, equity potential, and higher rental yields. And house buyers will find the low prices in a move into a quieter, roomier lifestyle.
Liverpool, Edinburgh Lead the Northern Pack
Affordable housing markets such as Liverpool and Edinburgh continue to attract new residents.
This trend isn’t new but it’s picking up pace and is raising property forecasts for the next 5 years to eye-opening price increases. As you’ll see in the home price chart below, property prices are very reasonable still in the north.
Liverpool, Manchester, Edinburgh, Leeds, Sheffield, Birmingham, Nottingham, Newcastle, Cardiff, Northampton, Glasgow, Bristol, Newcastle upon Tyne, Kingston upon Hull and Oxford aren’t the small towns and villages you would think buyers today are migrating to, but they’re hot markets.
It’s the suburbs of cities such as Edinburgh, Liverpool are seeing big interest and in Manchester suburban communities such as Walkden where 60% of homes are selling above the asking price. Last year, only 15% were selling above asking.
Manchester Evening news reported a 200% increase in the number of first-time buyers buying properties in Walkden from July 2019 to July 2020.
Rising Prices and Rental Yields Make a Good Property Investment
RW-invest reports that the average property price in Liverpool is 182,913 and has grown 8.45% in the previous 5 years. Liverpool rent yields come in at 5.5%. And in Edinburgh, the average home price is 340356 and has increased 12.3% over the last 5 years. Average Edinburgh rental yields came in at 4%.
Hometrack.com reported home price growth in Liverpool of 3% in the last year yet it’s 2020 Corona Virus shutdown trough to current date growth is only 25.6%, one of the lowest in the UK. That could be why demand is becoming more intense now as the Corona Virus era drags on waiting for vaccines.
In contrast, the housing market in London has suffered greatly. The migration of residents outward to the suburbs is noted, while some are escaping to Northern England. The most desirable London suburbs was Barnes, Clapham, and Chiswick according to Benham & Reeves, Estate Agents located in London.
Richmond, Wandsworth, Putney, Wimbledon, Islington, Highgate and Maida Vale round out the top-ranked locations. Buyer demand is lowest in Canary Wharf, Marlebone, Mayfair, Fitzrovia, and Pimlico.
Benham & Reeves noted that the demand outside London is even more intense in the high end of the residential real estate market.
Post Corona Virus May Not Slow the Demand
While many are searching in commuter communities and believe things will return to normal next year after the pandemic passes, others believe work at home is here to stay. These would-be buyers are looking at homes for sale and rentals further away. They’re looking for more space, healthier lifestyles, and lower prices and rents.
The trend might only reflect what many buyers have wanted and couldn’t previously have. With the lockdown and associated business changes, along with the Stamp Duty holiday opportunity, that impulse to move to the country or another city is being acted on.
According to a release from PA News, villages are seeing the highest home buying activity. London villages such as Havergin, Upminster, Fair Oaks Hampshire, Formby Merseyside, Welwyn Hertfordshire, Shenfield Essex and Kirby Cross Essex have the hottest demand. Homes in these communities are selling much faster.
George Barker, sales negotiator at White & Guard in Fair Oak, said: “The pace of the market has been quite astounding, especially since the stamp duty announcement in July as our core market is selling properties between £300,000 and £500,000 where buyers can make the biggest savings. — from Yahoo Press Release.
Savills.co.uk has its sunny forecast for the northwest property market. They predict home price rises from 8% next year gradually decreasing to 6% in 2024.
Best UK Housing Markets
Is the future of the cities in the North of England without risk? There are local agents warning of a potential burst bubble due to the furlough scheme, stamp duty relief and mortgage holidays soon ending.
Northern England will face some headwinds, but the era of digital business is upon us, and many UK companies will find it hard to ignore the cost savings of locating outside the high priced commercial zones. And more employee talent will be working remotely which lowers business costs and makes UK companies more competitive.
So the trend to the countryside may not be ending with the Corona Virus vaccinations.
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