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North-East Regional Cities Growing in The Uk

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The annual rise in housing was 2 to 3 per cent in 2018 in UK where the analysts from PwC claim the growth may not change significantly in coming years. In 2017, property rates remained stagnant, and now are showing negative trends, which is expected to pick up by 2020. PwC claims the price of London homes can reach £509,000 by 2022. North East UK regional cities are some of the best performing, with more than 3 per cent growth in a year, and South west is worst with decreasing growth. The 2018 reports by IP Global claim many Asian investors are finding regional cities in the UK and Europe more compelling to invest. Middle-East buyers are searching for such properties in US and Thailand, in places with higher growth rate in future.

In 2017, UK cities Leeds, Manchester and Liverpool grew significantly with the rise in the number of investors from Middle East and Asia. Buyers from Middle-East also showed inclination towards properties in the European cities Frankfurt, Lisbon and Berlin where the enquiries for such high growth properties boomed in the last year. These cities are preferred by the buyers due to superior economic performance of the country and capital growth.

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Regional cities price and rents unaffordable

London price inflation led to 32 per cent rise in price across 120 postal codes in 2017, where the fastest growing region was Leyton and its surrounding areas, and the slowest growth was noted in Earl’s Court. The rise in home prices mostly drove away productive workers. There are other studies which claim workers coming to city centers and those need to travel long distance between home and office may have low productivity due to lack of proper rest time.

In 2017, the investment volume was highest in Manchester, Edinburg, Birmingham, Glasgow and Leeds. As per IP Global’s report 2018, Manchester and Liverpool are set to grow as the northern powerhouse where the growth will be about 19 to 20 per cent in coming 4 years in Manchester and prices in Liverpool will rise 17 to 18 per cent in 2018 – 2021.

Asian investors are seeking properties in these cities and also in other regions such as in Japan and Thailand. Japan property rates are highly affordable and are expected to give greater returns in coming years.

Such deals have made properties unreachable for local buyers in regional cities e.g. Manchester where the reports by the Council states – new houses built are unaffordable. The y-o-y rents in Manchester increased more than £100 and the homes are selling three times faster as compared to London. Even though many new constructions have been made in the past few years, there are more than twelve thousand people waiting to get social housing.

The growth in investors’ proclivity towards regional cities led to the rise in price of homes in Sheffield very fast, and only 1.4 per cent of the houses approved by the local government met the criteria of affordable homes. Even the rents of such houses are 80 per cent higher as compared to the local rates.

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