Brexit uncertainty, a general election on the horizon and rising interest rates have stretched affordability, therefore growth in London and the South will be particularly limited according to a recent Savills report. On the other hand, at this point in the property cycle, where growth is particularly slow in London, prise rises ripple out to other regions of the UK.
Currently the divergence in regions is particularly obvious and growth in the North West and Yorkshire is predicted to be over 20% by 2023. In London, by contrast, prices are only expected to rise by 4.5% in the same period. Additionally, the West Midlands are also predicted to perform well, at 19.3% over the next five years.
There are various factors that have led to these clear regional patterns across the UK. In addition to the points listed above, which have damaged growth prospects in London and the South, investment in the North has dramatically increased in the past few years. Areas in the Northwest such as Liverpool and Manchester have experienced significant investment with large companies such as the BBC, Facebook, Amazon, Hills Dickinson and Barclays moving their Headquarters there. Foreign investment has also increased, with Manchester outperforming many European cities due to heavy Chinese investment. Furthermore, West Midlands areas such as Birmingham are also boosted significantly with infrastructure spending and projects such as HS2 and the 2022 Commonwealth games.
Alongside capital growth, rental yield has also been performing particularly strongly in the areas listed above. The balance between both factors has led to investment preferences shifting away from London and the South. However, it is still vital to understand all aspects of property investment and it is always important to seek specialist advice. If you would like to understand more about the approach Nova Financial takes to Property Investment, feel free to contact us at 0203 8000 600 or email email@example.com.