Where will house prices rise fastest in 2022
Where will house prices rise the most in 2022?
House prices peaked this summer but market to settle
Throughout the last year house prices have been buoyed by the stamp duty holiday and lockdown restrictions which have caused pent-up demand. Although the rise cannot be attributed to stamp duty holidays and pent-up demand alone. Lockdown restrictions have altered the way people view their homes, leading them to place higher value on their living spaces due to working and learning from home.
House prices increased by 13.2% in the year to June 2021 as people scramble to capitalise on the savings to be made. House price growth exceeded expectations, with many industry bodies predicting a bleak year due to the economic turmoil the pandemic had caused. Savills for example, once predicted a 0% growth in house prices at the beginning of the year, before revising that figure to 4% and in July revising it upwards again to 9%.
According to forecasts, house prices will stabilise for the remainder of 2021, as workers return to the office. Overall, property prices are forecast to be 4.5% higher at the end of 2021 compared to the beginning and 1.5% higher in London specifically. Although it is normal to see London lag other UK regions in terms of house price growth – simply because of how much more expensive property is in the capital – the need for more space and better value for money has further stimulated growth in areas outside the capital.
House Prices in the North West of England
Property in the North West of England has performed the strongest in terms of price growth, with Liverpool’s annual house price growth of 8.9% to August 2021. Manchester experienced the third highest house price growth of 7.4%. Property in these two cities in the North West consistently perform well due to recent regeneration projects and new businesses moving to the area. The average house price in Liverpool stands at a modest £133,500, which is below the national average. Affordable property prices allow investors scope for capital growth and good rental returns, and certain post codes in Liverpool offer average rental yields of 10%+.
Good levels of capital growth can be achieved in Manchester if the right area is chosen. Salford, in Greater Manchester often achieves higher growth due to its comparable lower pricing but good links to Manchester’s city centre. House prices in Salford have increased by an average of 47.6% over the last five years and offers the largest returns in housing value in the North West.
Properties such as Michigan Towers in Salford are perfectly poised for capital growth. Located a three-minute walk away from MediaCityUK and an 8-minute journey from Manchester city centre, the development is ideal for media professionals and those working in the city. One-bedroom apartments in Michigan Towers start from £175,995 – an attractive price for a new-build in a desirable location.
North East Predicted to be Top Performer
The North East is predicted to be a top performer in terms of property price rises for the remainder of 2021 through to 2024. Prices in the region are predicted to rise by 6.5% this year and then between 4% and 6% a year between 2022 and 2024. The North East is one of the top performing regions outside of London in terms of job creation from foreign investment, with recent figures from 2018/19 showing that it creates 125 jobs for every 100,000 people of working age. The creation of jobs and affordability has started to make the region more attractive to live in. Historically the North East had a huge coal mining industry, but since the 50s when the mines began closing the region was blighted by economic decline. Thankfully, due to renewed investment, other industries are basing themselves in the North East due to low office space rents and access to a large pool of graduates.
Just recently the North of Tyne Combined Authority announced a £12m digital investment in Newcastle, North Tyneside and Northumberland which will help to create 600 jobs and safeguard 140 more. There is a strengthening digital sector in Newcastle and with the promise of new jobs brings new talent. The tech sector has shown resilience to the pandemic and Brexit and shows promising signs of growth. Throughout 2020, the number of unique tech jobs advertised in the UK outweighed that of key European countries on average by 259%, making the industry an attractive prospect for innovative individuals.
Newcastle also offers affordable living compared to many other major towns and cities in the UK. According to data from the Land Registry, the average property price in the city is £175,973, compared to a UK average of £255,535 (circa July 2021). Affordable housing combined with an increasingly vibrant jobs market will make Newcastle an attractive city for people to live and work in.
House Price Increases in Nottingham
Nottingham is a city in the East Midlands. The East Midland’s population is expected to grow by 7% between 2018 and 2028 – the highest of any English region. Nottingham is home to well-known firms such as Boots, EON, Experian and Capital One, offering young professionals good career opportunities. Similarly, average house prices are £193,199 which is significantly below other cities with the same employment options. This makes Nottingham an attractive place to live for young professionals looking to balance an affordable way of life with an exciting career.
The city is also experiencing significant regeneration such as the construction of HS2 at Toton – just west of the city. Once completed, this will better connect Nottingham with other key cities in the UK. In 2020 planning permission was granted to the first phase of a £650m Island Quarter regeneration project. The phase will include the development of a three-storey 2,000 sqm pavilion on the waterfront, featuring two restaurants, around 500 sqm of events space with panoramic views and a large rooftop terrace.
Last year, Nottingham was one of the top three risers in terms of house price growth, as Hometrack Cities Index reported a growth of 5.8% year-on-year to December 2020. Due to the significant amount of regeneration in the pipeline including improving transport links and a dramatically increasing population, we predict that house prices in Nottingham will perform strongly in 2022.
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Investors looking for UK property investments should get in touch today to learn more about the areas offering high capital growth, why house prices are increasing in these areas, and the opportunities within them. Investors should be mindful that the rising cost of energy and building materials may affect house prices, so it is best to invest sooner rather than later to achieve the most capital growth.
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