The UK’s real estate market has seen a number of seismic changes during the course of the COVID-19 pandemic. One of which has been a complete change in priorities for millions of workers, who have found themselves either entitled or obligated to work from home.
According to recent data published by A-Plan Insurance, 90% of the UK’s top areas for house price growth over the past 10 years were in London.
Waltham Forest saw the strongest growth since 2011 at a staggering 126%, followed by Hackney at 105% and Dagenham at 96%. Greenwich, Bexley, and Newham were also ranked within the top 10 hotspots.
But what’s interesting is that while house prices remained disproportionately high in most areas of London, investors are increasingly setting their sights on potential future hotspots. Of which, many are further north.
Dale Anderson, managing director of Fabrik Invest, explains:
“Looking ahead ten years, it’s easy to imagine that nine out of the next ten property hotspots will be in the North. We’ve seen a huge shift in investor interest from south to north in recent years. That’s because northern cities are delivering greater potential for capital growth, better yields, and strong, sustained tenant demand,” explained the managing director of Fabrik Invest, Dale Anderson.
A new market front runner?
Elsewhere, Savills recently published figures suggesting that the highest property price growth over the coming five years will happen in the North of England. Specifically, forecasts from 2021 to 2025 indicate possible house price growth of just under 29% in the Northwest, followed by 28% in Yorkshire and the Humber.
By contrast, the broader average increase across the rest of the UK is expected to hover around the 21% mark.
While this is happening, London, the South East, the South West, and the East of England will see average house price increases of around 12.6% to 18.7%. Understandably, investors are setting their sights on property investment opportunities in the North with the kind of interest and enthusiasm not seen in some time.
“The Northern Powerhouse initiative opened a lot of investors’ eyes to the potential of the North. At the same time, so many ‘best place to live’ type accolades are going to northern cities,” continued Anderson.
“Add in the fact that increased working from home has cut many families’ ties with specific locations, meaning they can head north in search of better value, and there’s a clear case for this region leading the UK over the coming decade.”
Two major driving forces
One key factor behind the northern boom is the extent to which major cities like Manchester, Liverpool, and Birmingham have seen such heavy investment in infrastructure and general redevelopment works over recent years.
Average property prices are still comparatively low in such cities, but living standards are accelerating rapidly. The average home in Manchester costs just £187,100. In Birmingham, it’s £178,500.
In addition, the pandemic has played a major role, as millions have embraced the opportunity to work predominantly or exclusively from home. Many of them have abandoned London in search of greener pastures up north, where their money is worth considerably more than it was in the capital.