The new housing hotspots
The housing market has been so dull for so long we’ve forgotten what ‘hotspot’ means, but now three cities are tipped for well-above-average price growth.
hometrack, which runs a monthly house price index, says Manchester, Birmingham and edinburgh are expected to rise by 20 to 30 per cent in the next four years, closing the price gap with southern cities such as London, Oxford and Cambridge.
In the past year, edinburgh prices rose by 7.7 per cent, with a 7.3 per cent hike in Birmingham and 6.7 per cent in Manchester. London prices grew by just 1.6 per cent — meaning that once inflation has been taken into account, real values of houses in the capital have fallen slightly.
So what’s on offer in the three top tipped destinations?
INVEST IN MANCHESTER
The average price of a home here is just £158,800 says hometrack — well below the UK norm, making it a bargain purchase given the Northern Powerhouse investment that will be centred on the city.
Cushman & Wakefield, an estate agency, tips locations near the city’s 16 main stations and the metro network as likely to see the highest price growth this year.
Consultancy Deloitte, which has identified Manchester as one of europe’s top growth areas, says more than 11,000 new homes are under construction in 41 separate schemes. Some of the largest schemes are near the big Victoria rail station, at the city’s Middlewood Locks, and in Salford which has been transformed by the BBC and its Media City.
Because of the expected new jobs, Manchester is a favourite with buy-to-let investors. An average £158,800 home is tipped to make £47,640 capital growth by 2022 before counting rental income.
If you plan to buy in this city, don’t hang about. The typical home stays on sale for just 36 days according to the homeOwners Alliance — that’s the fastest in the UK, where the national average is 61 days.
RACE TO BIRMINGHAM
here, the typical home is even cheaper at £154,600, although expect that to rise steeply thanks to the scale of regeneration. There’s a new residential and retail zone called Smithfield, plus a new cultural quarter in the east of the city.
The hS2 train service — linking Birmingham with London, Leeds and Manchester in eight years’ time — is leading to new homes, entertainment areas and shops around the Curzon Street station, which will be a key hub.
With Abu Dhabi retail giant LuLu choosing Birmingham for its european base, along with new premises for Deutsche Bank, hSBC and hM revenue & Customs, it’s easy to see why the city is on the up.
The fastest growing prices are in formerly unfashionable Ladywood, according to a report by the mortgage arm of Barclays Bank: here, average prices have soared to £172,498 today from £147,121 in late 2016.
hosting the Commonwealth Games in 2022 will give the city a further boost. The development of the Perry Barr athletes’ village is set to be converted into 3,000 new homes after the event.
EDINBURGH PERFORMS
‘ThIS city has bucked the UK national trend over the past year with both prices and activity levels rising,’ says Oliver Knight, of Knight Frank. homes get snapped up 17 per cent more quickly than average, with many going for above their asking price.
A separate forecast by estate agency JLL expects edinburgh prices to increase by about 4.1 per cent per year until 2022, with rents rising by 3.3 per cent — both figures are well above average UK predictions.
The typical home in edinburgh now costs £222,000 according to hometrack. A new, aggressive purchase tax — the Land and Buildings Transaction Tax — has replaced stamp duty in Scotland and has added to the cost of buying high-priced homes. But even so, agents report strong demand.
The fashionable New Town and West end in central edinburgh remain firm favourites with buyers, but a property drought is pushing up prices.