The pandemic’s boom period of house prices has certainly slowed, but cities like Manchester, Leicester and Newcastle are holding strong.
Having recently been named alongside Bristol as one of the UK’s top investment locations for buyers looking at long-term growth, Manchester has now been listed as having the highest rate of house price growth out of the UK’s major cities, despite a general slowdown in pricing across the country.
The north west city has seen the average monthly rate of house price growth increase by 0.5% per month in the post-pandemic period, while the rest of the UK’s major cities saw prices increase at an average rate of 0.2% per month. Leicester has had the same growth as Manchester, while Newcastle is slightly behind (0.4%).
This puts the cities well ahead of the UK average when analysing the long-term trend, according to the research from Barrows and Forrester, which analysed 15 major cities across the UK to compare their house price growth during the pandemic and in the months following.
Manchester riding out the slowdown
During the Covid pandemic, after an initial stumble, the UK housing market soared in terms of both transaction levels and property prices, with extremely high demand causing values to rise significantly more than the previous five-year average.
A number of factors have caused the recent slowdown, which Barrows and Forrester points out has come alongside a natural easing off of growth after the boom period.
However, cities such as Manchester have also seen the smallest price reductions when compared with the pandemic boom period, with the rate of house price growth only falling by -0.2%, while it fell by just -0.3% in Leicester. Demand and transaction activity has remained particularly resilient.
However, other UK cities have brought down the UK average after their growth slipped into negative territory in the aftermath of the pandemic. For example, prices in Aberdeen fell by an average of -0.2% per month, and Swansea has seen a flat rate of growth of 0%.
Other cities in the list behind Manchester include Bristol, London, Bradford and Liverpool, which have registered very marginal growth at an average rate of 0.1% per month.
Post-pandemic correction
James Forrester, managing director of Barrows and Forrester, pointed out that the UK housing market as a whole is “standing firm”, but there will always be regional and location-specific variations to take into account.
“We’ve undoubtedly seen a post pandemic correction over the last year or so, following such a sustained boom period that drove house prices to all new highs,” he said. “While the market is standing firm, there has been a clear slowdown in the rate of house price growth seen and this is no different across our major cities.
“Of course, the property market is fragmented in nature and so the extent of this slow down also differs considerably from one city to the next. Manchester, Leicester and Newcastle are still posting a strong performance despite the wider landscape.”
High confidence in Manchester
Earlier this year, the annual Crane Survey conducted by Deloitte marked out Manchester as one of the top cities in terms of residential and commercial growth, with the city seeing one of the highest levels of new construction taking place across all major UK cities.
This is a sign of high developer confidence, pointed out the report, as well as the economic health and resilience of the city, with investors keen to continue to invest and regenerate the area.
Deloitte also pointed out that Manchester was one of the first regional cities to recover, in terms of construction activity, in the wake of the 2008 economic downturn, and it has led the way since then. From a property investment perspective, this level of resilience is a welcome sign of a city that can withstand turbulence.
