UK regional cities ‘new hotspots’
Birmingham, Manchester and Edinburgh will see property rises of up to 30 per cent in the next four years, according to a new report from Hometrack.
Whereas London, Oxford and Cambridge have topped the list of UK cities for house price growth in the past decade, with average rises above 70 per cent since 2009, the latest figures show these south-eastern locations near the bottom of the rankings, with values just around 1 per cent higher in January 2018 compared with a year earlier.
Edinburgh, by contrast, registered an increase of 7.7 per cent in property values in January 2018 compared with a year earlier, alongside Birmingham with 7.3 per cent and Manchester with 6.7 per cent.
‘The income to buy a home in regional cities is well below the London average, so in the near term we expect to see rising prices stimulating additional buying and market activity in those areas,’ said Richard Donnell, insight director at Hometrack. ‘House prices have some way to increase before there is a material constraint on demand.’
For investors, the higher potential yields on properties in regional cities is an additional attraction. In London, gross yields have now fallen below 4.5 per cent, which may lead to a softening of values in the capital despite continued scarcity of supply.