With buyer demand hitting record highs, UK house price growth is remaining strong. And the north of England is seeing some of the biggest growth.
Buyer demand is 27.5% higher in the year to do date than in 2020, according to Zoopla’s latest House Price Index. Supply is still low with the number of new homes coming to the market down 6.1% compared to 2020. The supply-demand in-balance is expected to remain in the coming months.
In March, UK house prices increased by 4% annually. For the past five months, house prices have been growing by this rate or more. March’s house price growth is the slowest rate of growth since October 2020. This shows house prices are levelling off after increasing steadily for many months.
Grainne Gilmore, head of research, at Zoopla, explains: “The fundamental imbalance will remain. Demand will remain strong as the ‘search for space’ among homeowners has further to run, especially as some office-based businesses are now confirming how their working practices will change in the longer-term.”
“More flexible working arrangements open up new opportunities for homeowners to move to a further-flung location. At the same time, the roll-out of the 95% mortgage guarantee will mean more demand from first-time buyers, fuelling demand without replenishing supply.”
More affordable regions and cities lead the way
House prices are continuing to outperform in areas where homes are more affordable. Wales is leading annual house price growth in the UK with a 5.3% increase annually. Yorkshire and the Humber and the north-west follows with 5.3% and 5.2% house price rises. The lowest house price growth is currently in London with only 3.1% growth annually.
In Zoopla’s latest Cities House Price Index, cities in the north are continuing to see the strongest house price rises. With more affordable property prices, these areas are seeing especially strong demand as homebuyers and property investors can get more for their money there.
Out of the 20 cities on Zoopla’s index, Manchester, Liverpool and Leeds are seeing the strongest house price growth for the third straight month. These cities also have average property prices well below the UK average price of £223,700.
Manchester: Leading the way, Manchester is seeing the strongest annual change in house prices with a 6.5% rise. The city has led house price growth for the past two months and before that was in second for the previous two months. After this growth, the average property price in Manchester now sits at £185,800.
Liverpool: Another city in the north-west, Liverpool follows closely behind with a 6.3% rise in house prices. The city saw the strongest growth in the January 2021 and December 2020 house price indexes. Liverpool is also home to one of the lowest average property prices with £130,600.
Leeds: Leeds came in third with 5.4% annual house price growth. The city has been in third for the the past three months and bounced around the top five prior to that, showing the city is seeing sustained growth. The average house price there is still at an affordable £179,100.
Will the north keep seeing strong growth?
While UK house prices and demand are expected to level out, parts of the north are expected to continue leading with strong buyer demand and house price growth. During the tapering period of the stamp duty holiday, there will likely be strong demand in more affordable areas, especially in the north. From 1 July to 30 September, the nil-rate band will be in place for properties up to the value of £250,000.
The north is also forecast to see strong growth in the long term as well. In the five years to 2025, Savills predicts house prices will rise the most in the north-west and Yorkshire and Humber with prices forecast to increase by 28.8% and 28.2%.
Manchester, Liverpool and Leeds are slated for strong long-term property investment prospects. And with more investment and development coming to the cities and regions, this will further boost demand in the northern property market.
At BuyAssociation, we have a range of property investment opportunities available in cities across the north. Sign up for free to get first access to our best deals or contact us for more information.
