Economists predict that London’s property market won’t fully get back on its feet until 2021. But cities in the north, including Leeds, will benefit from ‘Northern Powerhouse’ initiatives.
This year has witnessed average house prices in central London falling for the first time since the financial crisis in 2008. The downturn is almost certainly due to the fears of market stagnation as a result of the ongoing and painfully slow negotiations to leave the European Union.
Brexit Caused Slowdown
While the growth of house prices has slowed across the country since the Brexit decision in June 2016, some forecasts suggest that market momentum will start to pick up around 2019. That’s the year the UK is set to leave the EU, regardless of the ‘deal’ negotiated by the government.
Continued uncertainty linked to Brexit, along with rising interest rates, will kickstart various adjustments in housing prices, according to KPMG. Growth in central London will be further stalled by the changes to stamp duty made earlier in spring 2016.
Is London Resilient?
Projections suggest that property prices may start to increase again by 2019, with London headlining the market growth by 2021. KPMG points towards London’s ‘unique characteristics’ helping its resilience to fluctuations in the market.
They say: “London’s property market isn’t just made up of people’s homes. Foreign investors plough money into property in the capital as it is seen as a safe haven asset, and they will continue to do so after Brexit, especially if sterling remains weak.
“If the UK’s exit from the EU is done in a positive way, we’re likely to see demand for property in the capital rise as it will remain one of the most vibrant and exciting cities in Europe.”
Investment Boost in the North
Whatever happens post-Brexit, and with a lack of clarity still, it’s very difficult to accurately predict what will happen. But Leeds in particular, along with Sheffield and Manchester will benefit from Northern Powerhouse initiatives.
The government is specifically backing northern cities to boost the local economy. Investing in innovation, skills, transport and culture, and giving budgetary power and decision making to authorities in the North will help reach the huge potential in Leeds and elsewhere.
Northern Powerhouse Initiatives
As part of a targeted initiative to boost the potential of northern cities, the government has set out its aims. They are investing £3.4 billion into the north through growth deals, £70 million for the schools strategy in the region and £13 billion on transport.
The growth in employment in Leeds and nearby cities will increase the number of people who want to live there. This will in turn increase the fantastic opportunities to invest in property.
UK house prices will continue to be upheld by the shortage of properties for people who want to buy. Regardless of the political situation, the ongoing investment in the Northern Powerhouse will make these cities the increasing focus for investors from overseas.
Northern Cities Will Thrive
Brexit has led to uncertainty in just about every sector, but with the focus increasingly moving away from London in terms of property investment, new areas of opportunity are opening.
Leeds looks set to capitalise on an increase in infrastructure, education and transport investment that is coming in to the city. It’s an investment hotspot guaranteeing higher yields than the capital, and a city with a bright future. The time to invest is now – take advantage of the growing power of the north.