Property prices booming in unexpected places
20 March 2018
By Nick Perman
When it comes to rising property prices, the focus is often on London and the South East. But is that all changing now?
Emerging property hotspots, such as Cardiff and major cities in the North West are often ignored, with the price booms in unexpected places not receiving the same coverage.
What could these price rises mean for sellers and buyers, though, and should buyers get in early before prices rise too high?
North West dominates growth table
According to Your Move’s House Price Index, prices in the North West are growing quicker than any other region. Prices are up 4.6% annually, and Blackburn with Darwen has experienced the biggest price increases in the country, up by 16.4% on an annual basis. Warrington, too, has witnessed double digit growth, with prices rising by 10.3%.
Meanwhile, prices in Greater Manchester have risen by 4.3% and in Merseyside they are up by 8%.
The only region that currently competes with the North West on price growth is the South West, with prices up by 4.1% on an annual basis. This is being propelled by strong growth in North Somerset (up 12.1%) and Bristol (up 9.2%).
Cardiff, Wales’ capital city, has seen prices go up by 2.4%, while the West Midlands and East Midlands have also witnessed reasonable price increases in the last year.
By contrast, prices fell in London, down by 0.8% (or £4,662) in January 2018 and down 2.6% annually, the largest fall since August 2009 when the full consequences of the global financial crisis were starting to be felt.
Your Move’s research found that Wandsworth has seen the biggest fall in prices, with prices falling by nearly 15% (just over £100,000) in the last year.
Price growth in Wales outstrips UK
Data from the Principality Building Society showed that Welsh house prices rose by 3.3% in 2017, which was slightly faster than the UK as a whole. In 18 of Wales’ 22 local authorities, house prices grew last year, with Pembrokeshire seeing the highest rise at 8.1%.
High-demand areas such as Cardiff and Newport drove the Wales-wide growth, with a lack of supply, low interest rates and high employment all helping to push up average prices.
Findings from LSL Acadata found that price growth in Cardiff and Newport was particularly strong in the first month of this year, up by 3.6% and 5.1% respectively. People escaping from nearby Bristol, Bath and other pricier cities in the South West of England are helping to increase demand (and prices) in South Wales.
A large number of new-build homes entering the market in Newport have also helped to boost the city’s appeal to buyers. In 2017, Newport built the highest number of new-builds in Wales and also saw its house prices reach new heights (up to a new peak £183,683, slightly ahead of the national average in Wales).
An unexpected leader
While strong house price growth in Greater Manchester and Merseyside might be expected – given these regions are home to the in-demand, booming cities of Manchester and Liverpool – Blackburn with Darwen’s excellent performance might have raised a few more eyebrows.
The council covers Blackburn, the small town of Darwen and the surrounding countryside. While Blackburn might be known for its football club and key role in the Industrial Revolution as the centre of textile manufacturing, it has rather been overshadowed in recent years by its more high-profile neighbours. It suffered years of post-industrial decline and neglect, but recent figures suggest the town is back on the up.
There are a number of planned or ongoing regeneration projects in Blackburn, ranging from new independent cinemas and leisure facilities to housing, road infrastructure schemes and town centre improvements.
Warrington, too, offers buyers the enticing combination of cheaper property prices and easy access to Liverpool, Manchester and Chester. According to Rightmove, the large Cheshire town has seen prices rise by 4% in the last year and up by 7% on 2015.
City of Steel shows its mettle
Another city that might sometimes be outshone by glitzier neighbours, Sheffield has witnessed stronger house price growth than any other in the last 12 months.
Research by property website Zoopla showed that prices in the city famed for steel, snooker, football and green spaces increased by 5.63% in the past year, just ahead of Glasgow (5.38%) and Manchester (4.49%).
Leeds, too – which, despite being the UK’s second largest legal and financial hub after London, can sometimes fly under the radar – saw strong house price growth of 4.20%. Leeds is set to benefit more than most from the proposed HS2 line, with prices and demand already up despite the troubles the transport project is having in getting off the ground, while the cheaper cost of living and numerous employment opportunities on offer make it popular among young professionals in particular.
What does this mean for buyers and sellers?
Sellers in the above locations – or other up-and-coming property hotspots – should feel positive and confident about their chances of selling their home for a good price. The market is still very much favouring those looking to sell, with supply continuing to outstrip demand across the country. This means a strong negotiating position on asking prices is likely.
However, conditions for buyers are also good in some ways, with low interest rates, cheap mortgage deals and the recent abolition of stamp duty for the majority of first-time buyers.
Buyers with one eye on moving up the ladder quickly, or purchasing as an investment, may also want to pay a bit more for a home in a property hotspot with the thinking that prices there will continue to rise and a good profit will be made in the future.
Despite significant price rises in recent times, average house prices in Cardiff, Newport, Blackburn and Warrington can also certainly still be considered affordable, so buying in a boomtown doesn’t necessarily mean you’ll be paying well over the odds.
The spread of house price growth away from London and the South East is a good thing for the market as a whole, but buyers may want to get in early before the unexpected property hotspots become too popular (and expensive).
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Very straightforward and helpful.
Boyo on 05/06/2021