Manchester and Liverpool thriving
The UK is on the up following last week’s Freedom Day with the government easing restrictions due to the successful vaccine rollout initiative, but how has this affected the property market, and what is expected to come? Over the past 12 months despite economic uncertainty across the world, the UK has seen continued growth in the market as consumers seek new homes/investments because of the stamp duty relief and long-lasting confidence that property proves to be a stable investment opportunity.
Regions in the north have seen the highest return on property over the last 12 months with Liverpool and Manchester leading the way at over 7% growth shown in the map graphic below. These areas have been subject to heavy investment since the economic crash of 2007 forcing major tech companies to relocate business to these areas where operating costs are on average 40% lower than that within London.
Market outlook
What’s predicted for these northern cities and have investors missed the growth spike? Saville’s outlook for the next 5 years shows that the ripple effect we have seen in the south will mirror in the northern powerhouses of Manchester and Liverpool and allow for area’s surrounding the city centre to grow significantly with the northwest predicted to have 28.8% growth over the next 5 years compared to the UK average of 21.1% and London at 12.6%.
The growth prediction from Saville’s is highlighted by the continued lack of supply in the UK market as the government has struggled to meet its target of new homes each year resulting in the property prices historically continuing to grow long term despite economic events. The flow of new supply from the latest hometrack report shows that demand continues to outstrip supply and the stock of new homes for sale is -23.6%.
Over the past 55 years, the UK land registry data shows how the market and property prices have continuously increased as long as investors hold their property value as a long-term investment. Crashes in the market are inevitable and a natural occurrence within global economics however the UK property market has thrived in the last 12 months due to the safe investment historically over a long-term outlook. As we look forward and the stamp duty is being phased out, this hasn’t halted demand in the market for property. The continued lack of new supply in the market and a yearly increase in the UK population encourages investors to understand that in the coming year’s demand will outweigh supply and continue to push property prices up.
As the economy opens to its full potential once again and offices begin to operate at closer to full capacity confidence of renters still looking for city-center postcodes to accommodate is increasing back to levels seen before the pandemic. As investment continues to expand the outlook for cities in the northwest for the future is very positive and as more opportunities come available for students and workers to move into the area the supply of new homes will have to mirror the excessive demand the market is experiencing.
