With the average UK house price hitting almost £300,000 in the latest figures, the North West continues to show the greatest gains, holding the region up as one of the country’s property investment hotspots.
The latest house price index released by Halifax shows that UK house prices ended the year 3.3% higher than 12 months earlier, despite a small 0.2% monthly fall in December’s figures.
It marks the end of what was a “broadly steady” year for the UK property market, which saw prices increase the most during the second half of the year thanks to declining mortgage rate, stronger income growth, and a renewed appetite from buyers who may have been holding off during 2023.
The average home in the UK, according to the mortgage lender, now costs £297,166, which is higher than Nationwide’s figure for December of £269,426. The discrepancy is down to the fact that each lender uses its own mortgage lending data to compile their index. Separately, indices released by the likes of Rightmove and Zoopla look at asking prices on the portals, meaning they often trend slightly higher.
Yet one common factor across the various measures is the above-average house price growth that continues to take place in the North West of England, led by cities like Manchester and Liverpool as well as top-performing locations in the surrounding areas, such as Stockport and Bolton.
Positive prospects for North West
Halifax’s research shows that the North West experienced a house price rise of 5.3% during 2024, which is 2% higher than the national average. This was only surpassed by Northern Ireland, where values increased by a huge 7.4% over the same period.
In Zoopla’s latest index, the North West city of Manchester is in the lead when looking at England’s major cities, and it has held this position for many months.
As a city, Manchester has been a favourite among property investors for a number of years, with numerous exciting regeneration projects taking place in and around the city centre, boosting its appeal for buyers and tenants. This includes major transport improvements, with the city’s Bee Network spreading across more of the North West to boost transport options in the area.
Another of the North West’s major successes has been Liverpool, where extensive ongoing redevelopment on both sides of the River Mersey has provided new opportunities for investors looking to buy into an area with more improvements on the way.
With demand continuing to outstrip supply in the North West, despite huge numbers of new developments expected to be unlocked thanks to planning changes and additional investment, the region is widely expected to continue to lead the UK property market.
Savills’ latest forecast predicts the North West will see house price gains of a cumulative 29.4% over the next five years, more than anywhere else in the UK. This means it is likely to remain a hotspot for property investors looking to maximise their return on investment through capital appreciation in the coming years.
What’s in store for 2025?
It can be very difficult to predict how the housing market will perform, as it can be affected by a wide variety of factors. It is important to note, though, that certain fundamentals will always exist, and support the market: demand for housing, balanced by the supply of new homes being created.
In the North West, it is this heightened appetite among homebuyers and property investors alike that is expected to continue to push prices upwards. In the wider market, too, there remains a shortfall between the number of properties available and the number of people seeking homes.
Amanda Bryden, Head of Mortgages, Halifax, addressed some other issues that could affect the market in the coming months: “The housing market was broadly steady at the start of 2024, with house price growth taking off from the summer onwards.
“In the latter half of the year, house prices grew in response to the falls in mortgage rates, alongside income growth, both leading to financial pressures somewhat easing for buyers.
“Impending changes to Stamp Duty thresholds have also given prospective first-time buyers even greater motivation to get on the housing ladder and bring any home-buying plans forward. Together, these elements meant mortgage demand picked up, hitting the highest level in over two years and back to levels seen pre-pandemic.”
Looking to the year ahead, she added: “Where does that leave the housing market for 2025? While the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming Stamp Duty policy changes, mortgage affordability will remain a challenge for many, especially as the Bank Rate is likely to come down more slowly than previously predicted.
“However, providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year.”
If you’re looking to invest in property in the North West of England, or one of the country’s other top-performing locations, get in touch with BuyAssociation today, or browse some of our current opportunities here.
