The Best Place to Buy Property in the UK in 2021
2020 was an unusual year for the UK property market. With social distancing measures in place and a national lockdown, the first half of the year saw demand significantly slow due to restricted property transactions. With the stamp duty holiday introduced in July 2020, the UK property market saw demand and house prices rise to reach an all-time high.
Despite challenges like a third nationwide lockdown, the UK housing market remained resilient in the beginning of 2021, and trends show the market continues to adapt with the second half of the year looking promising. The knock-on effects of government measures like the stamp duty extension, pent-up demand and economic growth, coupled with the vaccine roll out and life steadily returning to “normal”, mean housing markets across the UK are expected to remain buoyant.
UK Property Market Trends 2021
The ongoing Coronavirus pandemic continues to have an impact on the UK property market in 2021 and the start of the year saw a shift in demand for the type of property in particular. With a shift in lifestyle and people spending more time at home due to several nationwide lockdowns, property preference has shifted slightly with houses selling faster than flats and buyers seeking more square footage and outdoor space.
In 2021, UK property investors should consider a possible shift in buyer priority towards larger suburban houses, rural properties with outdoor space and land and extra rooms for a home office. With work commutes likely slow to return in 2021 and more companies open to remote work arrangements, the UK property landscape will see regional variations.
With all this in mind, which are the best places to invest in property in the UK 2021? Here are the cities catching the eyes of property investors.
With its strong economic growth, attractive lifestyle offerings and thriving business scene, Bristol remains one of the best places to buy property in the UK in 2021. As a result of its popularity, house prices have increased at a rate not seen anywhere else in the UK.
While average asking prices in Bristol increased 60% over the past decade, since the pandemic began house prices in the city have increased by almost £1,000 a month.
The search for space is driving demand for family homes, and prices for houses are rising faster than flats. The majority of sales in Bristol during the last year were terraced properties, selling for an average price of £323,867. Semi-detached properties sold for an average of £354,382, with flats fetching £265,269. With the end of the Stamp Duty, Bristol housing prices are expected to ease. However, prices are expected to rise up to 20% between 2021 and 2024, so now is a great time to get in while you can.
With buyer demand hitting record highs in mid-2020, the north of England saw some of the biggest growth. Leeds had the country’s second-fastest rise in house prices after London at 11.3% and average property price climbing to £247,116, in just 12 months.
With a growing population and strong economy, Leeds was already at the forefront of the UK’s property market, and the pandemic has resulted in a shortfall in new housing being constructed. Through to 2026, JLL predicts the city’s house prices will increase by 13.5% making Leeds a city property investors shouldn’t ignore.
Rising areas of Leeds include Kirstall, where housing prices continue on an upward trajectory thanks to close proximity to the city centre. Burley has long been an area popular with students, and sitting between Kirkstall and the city centre, offers strong transport links and affordable housing for a decent return on investment.
The largest economy outside London, Birmingham’s growing population combined with a housing shortfall mean it is forecast to see one the strongest rental growths of any UK city.
Prices in Birmingham city centre are 0.7% higher than a year ago and while prices are expected to remain flat in 2021, in 2022, forecasts predict they will rise to 4%. According to JLL, the future forecast for Birmingham property also looks promising and from 2022- 2025 house prices are expected to see growth of 19.5% – the strongest in the UK.
With a likely increase in the option to work from home as a result of the pandemic, renters and buyers are increasingly seeking out areas relatively close to cities, yet with more space and larger square footage.
Just 30 minutes into London by train, Luton is a commuter property hotspot and the UK’s most popular destination for first-time buyers. With relatively low property prices and good potential for capital gains, the city is on the list of top locations for UK property investment in 2021.
From February 2020 – February 2021, the average property sale price in Luton rose by £11,000 to reach £242,370. At the same time buyers paid 20.9% less than the average price in the East of England (£306,000) in February 2021 for a Luton property.
An investment hotspot for some time, Manchester continues to be one of the UK’s top performing cities for property investment. Regeneration and ongoing investment continue to transform the city and Manchester stands among the highest economically performing cities in Europe.
In the past year, Manchester saw the strongest change in house prices in the UK with a 6.5% rise and the average property now sitting at £185,800. Looking ahead from 2021 – 2025, forecasts predict Manchester to see the highest sales price and rental price growth of any UK city at 17.1% and 16.5%, respectively.
A world-class, internationally recognised city that attracts over £1 billion a year in investment, a Liverpool investment property can offer some impressive returns. With relatively low house prices and high rental demand, the city continues to remain on one-to-watch property investment lists, and 2021 is looking promising.
Since sales started after the first lockdown, the city experienced a mini housing boom. Liverpool saw a 6.3% rise in house prices compared to 12 months ago and over the next five years, property prices are expected to rise by 13.1%.
When considering the best place to buy property in the UK in 2021, many cities present the opportunity for investors to make a decent profit. With the reopening of the market and a surge in sales and purchases, investors should look to the longer-term investment potential while also considering the slight shift in what renters and buyers are looking for as a result of the pandemic. To find out more about the best place to buy property in the UK in 2021, contact our team.