While house prices across the UK continue to see a steady rise, it seems that the same can’t be said for house prices in Greater London. According to a study carried out by the Office of National Statistics (ONS), London saw a steep 1.4 per cent year-on-year decrease in August, where the average house prices had dropped to £472,753. This isn’t a new phenomenon – despite the Greater London area seeing a steep incline within the last decade, the London property market seemed to suffer in recent years. In a separate analysis carried out by the property portal Zoopla, it was revealed that London house prices saw a 56 per cent increase since the housing market peaked in 2007, but they appeared to stagnate in last four years.
It is believed that house prices in London and the surrounding areas have become so expensive, that people are being priced out of the area. According to the ONS, tenants in London are spending as much as 83 per cent of their monthly income on their rent – a stark comparison to the nationally recommended 30 per cent. As a result of this, people are leaving the capital in their droves. According to the financial times, the number of people leaving London has grown by 55% in the last five years and a 2018 report by Knight Frank revealed that the number of people reached a record high in 2017.
It’s not just residents that are moving away from London – Investors are starting to look elsewhere as well. According to Hamptons International, the number of property investors in London had dropped by 34 per cent, thanks to the market becoming increasingly saturated and a stamp duty surcharge on second homes being introduced in April 2016. Coincidentally, the number of investors moving on northern cities increased by 34 per cent in the same period, suggesting that investors were shifting their focus from the capital to cities in Northern England. This should come as no surprise; Not only do cities like Liverpool, Manchester and Sheffield offer investors better value for money, they have also experienced extensive regeneration, so they have become more attractive to large companies and professionals seeking new opportunities.
The UK is finally in a position where there is less focus on the capital and we’re starting to see the potential that regional cities have to offer. Not only does this bring more opportunities throughout the country, it also eases the pressure on the property market in the capital.
Looking to make your next investment in the North of England? Take a look at our latest projects in Manchester and Sheffield.