With house price growth across the UK expected to average 14.2% over the next five years, the north of England is holding its own
Property prices in the north-west of England are forecast to see an average increase of 18.1% between 2018 and 2022, according to recent figures revealed by real estate agent Savills.
This is more than double that of Greater London’s projection of 7.1% over the same period, and exceeds the overall UK average of 14.2%.
Elsewhere in the UK, the north-east and Yorkshire and Humberside regions are also expected to see stronger than average growth rates of 17.6%, a boon for the Northern Powerhouse.
By contrast, the previous five-year period, from 2012, saw UK average house prices swell by 28%, meaning an overall slowdown of 14% for the second half of the decade.
Lucian Cook, head of residential research at Savills, believes that the uncertainty surrounding Brexit is acting as a “drag on house prices”.
Reducing risk
“There is capacity for growth once we have greater clarity,” said Cook. “Mortgage regulation, introduced in 2014, is likely to show its hand as interest rates rise. But by restricting the amount people can borrow, it will take the heat out of the market and so reduce risk now and in the future.”
Although the expected rise in mortgage interest rates over the next five years could have an impact on the amount people are able to borrow, substantial increases on the cost of borrowing are likely to be minimal, according to the report.
The findings are a turnaround on the five-year forecast from Savills this time last year, which predicted the east and south-east would see the highest growth.
The real estate agent also predicts that London rents will go up by 17% over the five-year period, outstripping the rise in house prices in the capital for the first time since 2011.
