Which UK cities are seeing the highest house price growth rates?
There’s a new kind of north/south divide in the UK.
Property growth in the main southern cities is seeing the poorest rates in seven years, whereas in the North prices have been steadily rising, according to the Zoopla and Hometrack house price index. In this article where going to look at the data to see which cities are seeing the best house price growth. We’ll talk about why this is happening too.
House Price Growth – The North South Divide
For the top 20 UK cities, the average house price over the last year, August to August, is 1.9% higher than it has been in the previous year. Northern Cities have seen growth of 3.5% on average, which is a huge contrast from the 0.3% growth from the southern cities. London, for example, has seen only 0.2% growth on the previous year.
As the index compares a selected 20 cities, it’s worth noting that those representing cities representing the North are Liverpool, Manchester, Newcastle, Leeds and Sheffield. The South, on the other hand, is represented by London, Bournemouth, Oxford, Cambridge, Portsmouth and Southampton. The index also compares UK city growth to a wider UK national average, in this case 2.4%. See the table below for a full breakdown.
House Price Growth – the Index
|City||Current average price||% change year-on-year Aug-19||% change year-on-year Aug-18|
|20 city index||£257,900||1.9%||1.6%|
Source: Zoopla House Price Index, powered by Hometrack
House Price Growth – Why is the North making gains on the South?
Here at Aspen Woolf, we have offered investors property all over the UK (and the world too). In recent years, however, we’ve heavily focused on Northern England because we have spotted the investment potential in these areas.
There are a few factors which contribute to this judgement. A key one of these is the comparatively low house prices in the Northern cities. In fact, using the table above we can see the radical differences in average house prices. The average paid for the Northern cities listed above is £147,020, compared to £347,016. That represents a huge difference of £199,996. It’s simply better value for money in the North.
Good Rental Yields
Another key reason is rental yields. Some of the best buy-to-let rental postcodes can be found in Northern cities. According to Totallymoney’s best BTL postcode ranking, 13 of the 25 listed are in Northern England specifically – six of these alone are in Liverpool, with L1 taking the top spot. Let’s compare that to the South – not a single one is in the south of England. Interestingly, in the listing of the worst 10 BTL postcodes in the UK, Southern English postcodes make up eight of them!
You’ve probably heard the term ‘Northern Powerhouse’ thrown around over the last few years, originally coming from now ex-Chancellor George Osbourne. In brief, the initiative is designed to boost local economies in the North (especially the core cities of Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle) by investing in skills, innovation, transport and culture, as well as devolving significant powers to these local authorities.
The specifics of the Northern Powerhouse can be broken down into Infrastructure, Business Environment, Ideas and People. Each category contains a set of projects spread across northern regions to grow local economies – from better connected transport routes to Media Villages, Apprenticeship Schemes and many more things.
There are many more investment initiatives that do not necessarily fall into the Northern Powerhouse scheme, but will nonetheless add millions, if not billions, to the economic outputs of Northern cities and towns. Consider, for example, the Leeds Southbank Regeneration project – designed to double the size of Leeds city centre, creating 35,000 new jobs and 8,000 new homes. Or one of the largest town centre regeneration projects ever, the Bolton Masterplan – worth an incredible £1.2 billion, and aiming to create 2000 new homes and 7,400 jobs.
What does this mean? It means that these Northern cities and towns are undergoing a transformation, introducing new jobs, raising the quality of office, public and residential spaces and buildings, and growing economically. House prices will continue to rise as these regeneration and development initiatives come to fruition.
All in all, at Aspen Woolf we think it’s an exciting time to be investing in Northern England. Not only that, but we believe that the Northern regions will remain hot investment propositions for some time.
We have a range of investment options available in Northern England.