Benefiting from higher yields on rental properties and lower mortgage rates, demand for property in the north has pushed property prices upward at a quicker rate than London.
- Northern regional cities are increasingly becoming more attractive to property investors
- Demand has placed upward pressure on prices, with capital growth now outpacing London and the south
- Property prices in Manchester rose by 3.4% in Q2 compared to 2.1% in London
House prices are rising faster in cities in the north of England and parts of Scotland than they are in the south of the country, new figures from property market analyst Hometrack show.
While the gap in the average value of property between the north and the south is still significant, it has narrowed. Booming prices in the likes of Glasgow, Leeds and Manchester far outpaced the growth in London and other southern cities, such as Cambridge.
Leeds, Manchester, Birmingham, Glasgow and Cardiff all showed greater growth than the south, and showed “no imminent sign of slowdown”, Hometrack says.
Their analysis says these areas benefited from high yields on rental properties, increased affordability and low mortgage rates. Hometrack expects the annual growth rate to be around 7%, with cities such as Manchester registering a 3.4% increase in property prices across the three months to July, with a year-on-year increase of 8.4%.
Richard Donnell, Insight Director at Hometrack said: “The slowdown in London is being seen across the market and is not accounted for by seasonal factors, with weaker demand from home owners and investors as supply grows.
“In contrast, northern regional cities will continue to register stable growth rates as households’ benefit from record low mortgages rates and affordability remains attractive.”
London recorded its weakest level of growth for 17 months, with prices up by just 2.1% on the previous quarter. In Cambridge, where the market has boomed for months, prices actually fell by 1%.