The North West continues to lead regional house price growth in England, but this month’s figures from Zoopla show Liverpool has edged out in front.
Over the past year, house prices in Liverpool have increased by 3.5%, putting the city at the top of the chart for price growth in England in the latest monthly index from Zoopla.
This is followed closely by Manchester with a 3.4% price rise, after the city has held the top spot for a number of months on the index. UK-wide, the location with the highest property price growth was Belfast with a 6.9% annual surge recorded this month; while for the UK as a whole, the average increase in the year to January was 1.9%.
Aside from Northern Ireland, which saw prices rises by a huge 7.2% over the past year, the North West of England is the leading region with an overall 3% house price increase, according to Zoopla. This puts both Liverpool and Manchester ahead of the regional average, with both locations widely forecast to continue to see strong house price growth.
By contrast, house prices in London and the South of England have only increased by 1 to 1.2% over the past year, although there are signs that the capital is returning to stronger levels of growth than a year ago.
Liverpool stands out for property investment
Homebuyers and property investors seeking a location with affordable house prices combined with strong prospects for growth are increasingly drawn to the city of Liverpool. For landlords, rental yields are also well above the national average in many parts of the city.
Separate recent research from Zoopla also named Liverpool as the most affordable city in England for one or two-bedroom properties – or for single or first-time buyers.
Its data revealed that the median value of a one to two-bedroom home in the city is £130,800 – putting it marginally above the new stamp duty threshold of £125,000 set to come into effect from 1st April – while median gross monthly pay in Liverpool is £2,980. With average monthly mortgage repayments of £540, annual value to earnings ration is 3.7.
With affordability constraints in the property market ongoing, it is likely that more affordable locations such as Liverpool will continue to see the strongest house price growth, making these areas more enticing for property investors seeking long-term returns.
Commenting on the figures, Tom Bill, head of UK residential research at the estate agent Knight Frank, echoed this forecast: “The rest of the country is closing the gap with London as demand spreads beyond the capital due to affordability pressures.
“The gap will narrow rather than close but we expect stronger house price growth in less expensive areas of the UK during the next several years. The push into more affordable areas will be reinforced by the flexibility more commuters have about how and where they live following the pandemic.”
Confidence climbing
As mortgage rates appear set to continue to edge downwards this year, while earnings growth remains robust, this is likely to translate into a boost to the housing market as confidence rises.
Richard Donnell, executive director of research at Zoopla, said: “The housing market is resilient, supported by faster growth in average earnings. There are the most homes for sale in 7 years, which will keep price inflation in check.”
This refers to the latest results showing that sales activity has accelerated in the UK housing market, “with all key measures of market activity running 10-11% higher than a year ago”.
The report adds: “Increased levels of housing market activity mirrors other measures of economic activity, including robust earnings growth, higher retail sales and signs that consumer confidence is on the rise.”
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