A beautiful historic building in Liverpool

Property investors in Liverpool and Manchester see biggest gains

Property investors who have selected stock in parts of the north west have seen the biggest boosts in their property values, alongside some of the healthiest yields in the country.

Those who purchased property in the major cities of Liverpool and Manchester have seen the strongest capital appreciation in the country over the past year, according to the latest Zoopla house price index.

The report singles out some of the places in the country that have seen the biggest jumps in house prices over the past 12 months, and the north west features heavily.

While Liverpool’s prices have risen by +10.1% in the 12 months to April, Manchester has seen hikes of +9.5% (while Nottingham also appears in the top list with house price rises of +9.7%). The north west’s towns have also seen top growth, including Warrington (+12.3%), Wigan (+12.2%) and Rochdale (+11.8%).

As the Zoopla report points out, it is largely the most affordable markets that have seen the biggest growth. For property investors, that means these areas remain key hotspots, where housing is affordable yet in extremely high demand.

The wider picture

Across the UK as a whole, Zoopla finds that house prices have risen by +8.3% over the past year, bringing the average home value to almost £250,000 – a £29,000 rise since pre-pandemic.

Zoopla also noted the same supply pressures as have been well documented by other indices, although the research found that the supply of new homes for sale is up by +3% on the five-year average. As ever, there are significant regional variations at play here, too.

Property investors will have noticed the increased competition to secure properties, with demand up by +58% in the four weeks to 24th April, compared to the five-year average.

Another factor affecting homebuyers and property investors alike is the additional homes that are now eligible for higher stamp duty rates as a result of house price rises. Zoopla estimates there have been around 4.3 million homes pushed into higher tax brackets in the past two years.

Honing in on London – a spot which has become increasingly unaffordable for property investors and homebuyers – prices have risen by +3.6% in the year to April. For flats, the average price has gone up by just +2% since the start of the pandemic.

Property investors competing with first-time buyers

One thing many property investors have in common with first-time buyers is the search for a bargain. To turn a healthy profit, buying at a reasonably low price point is one thing that can aid the bottom line. Of course, choosing an up-and-coming area with high rental demand is another key priority.

According to Zoopla, the average first-time buyer home has gone up in price from £197,600 at the start of the pandemic to £225,000 now.

“This means the average first-time buyer must find an additional £4,000 for a 15% deposit, and an additional £5,000 in added income every year to meet the criteria of a home loan which is within the 4.5 x income threshold,” notes the report.

For many first-timers, this could mean more reliance on family and other sources of income in order to raise a deposit. With rising interest rates, some will also have to think more carefully about which mortgage they choose in relation to the deposit they can raise.

What’s the outlook?

Unsurprisingly, Zoopla’s predictions largely follow those made by other property market pundits; that the ongoing supply shortage will continue, despite some easing, and this will support continued house price growth.

It adds: “However, the market will not continue to operate at its current pitch throughout the rest of the year. The economic headwinds which are already being felt in households across the country, will start to have more a material impact on the housing market in H2.”

This could put some downward pressure on house price growth, says Zoopla, adding: “These headwinds include the rising cost of living, and the rising cost of mortgage borrowing.”

Property investors considering their next move might be encouraged by the fact that demand in the market seems set to remain strong, though, particularly across certain locations.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT