House prices in the north-west of England are set for a long period of strong growth according to a new report from Savills.
It is predicted that values in the region will go up by 21.6% over the next five years, the highest figure for the UK. In London, by contrast, they are estimated to rise only by 4.5% in the same period. The West Midlands is also tipped to perform well, with a growth rate of 19.3% in the Residential Property Forecast.
Overall, prices are expected to rise nationally by 14.8% between 2019 and 2023, taking the average value of a property to just over £248,000.
The report identifies Britain’s departure from the EU next March as a key factor in the current conditions. “Brexit angst is a major factor for market sentiment right now, particularly in London,” says Lucian Cook, Savills head of residential research.
“But, it’s the legacy of the global financial crisis – mortgage regulation in particular – combined with gradually rising interest rates that will really shape the market over the longer term. That legacy will limit house price growth, but it should also protect the market from a correction.”
The report does sound a note of warning over the uncertainty of what kind of Brexit deal the UK will have, and its impact on the property market. “The sooner a deal is struck, the more certainty it will bring to the market. The more prolonged this period of uncertainty, the greater the chance that current market malaise will spread beyond London and the South East.”
Savills’ findings tally with several positive recent assessments of the market in the north-west and Birmingham.
- Liverpool topped Hometrack’s UK Cities House Price Index for the year to September with a figure of 6.9%.
- Manchester is outperforming many European cities and is attracting a lot of interest from Chinese investors.
- Birmingham is set to be boosted by major infrastructure projects like HS2 and the 2022 Commonwealth Games.