According to Savills, property prices in the North West are set to outpace the rest of the UK with growth of 18.1% over the next five years. This is well above the UK average of 14.2% and the 7.1% forecast for London. Lawrence Bowles, an Associate in Savills Residential Research team, highlights six reasons why the North West is set to prevail.
#1 MARKET CYCLES
Historically, whenever London has been the slowest-growing region, the growth profile has flipped to put the North West and North East as the fastest-growing areas. We predict this happening over the next five years; though perhaps not to the same degree as the past, given the economic and lending environment.
Manchester is an ambitious and growing hub, and will attract more investment. As yields tighten there, investment is likely to spill into other northern cities such as Leeds and Liverpool. Cheshire offers large, prime properties at a steep discount to the home counties, so could attract upsizers who would otherwise have moved there.
#3 HOUSE PRICE AFFORDABILITY
Affordability is far less stretched in the North West than in London. In the North West, the average ratio of house price to income was 3.7 for mortgaged first-time buyers; in London, the ratio was 5.5. The greater prospects of getting on the housing ladder is likely to make the region attractive to aspiring homeowners.
#4 DEPOSIT REQUIRED
The average first-time buyer in the North West pays a deposit of £19,000, 54% of their annual income. In London, it’s £99,753, or 149% of average income. That means people in the North West can afford to buy sooner and are less constrained by the need to accumulate stacks of wealth.
#5 STAMP DUTY
The cost of moving properties is much lower in the North West than in London. In 2016, the average SDLT rate paid in the North West was 2%, compared with 5% in London. Taking the difference in house prices into account, the average bill was £3,000 in the North West compared with £25,700 in the capital.
#6 RENTAL AFFORDABILITY
Rent on a median two-bedroom property makes up 23% of gross income in the North West, compared with 47% of gross income in London. This means that renters in the North West have more money left over to save towards a deposit. That is likely to mean the region retains more of its graduates.
Contact the sales team on 020 8688 6552 to enquire about Fabrick, our 184 apartment scheme in Greater Manchester. Prices start at £132,950 for a one-bedroom apartment.