In the Residential Property Forecasts for Spring 2021, Savills forecasts the North West of England to lead mainstream property price growth in the UK over the next five years. The region is slated for short- and long-term property price rises as demand continues to rise in the region.Despite the challenging year due to the COVID-19 pandemic, 2020 was a busy year for the UK property market. Prices increased by an impressive 7.3%. And the UK’s housing sector is continuing to show its strength and resilience even during adversity.
Now, with the prospect of a sustained period of low interest rates, there is capacity for robust house price growth in the coming years. The national average house price is predicted to increase by 21.1% in the five years to 2025. This includes a 4% increase in 2021, 5% in 2022 and 4%, 3.5% and 3% in the remaining three years.
Regional house price growth
Savills believes the East of England, South East and South West will see the strongest house price growth in 2021 with a rise of 5%. However, the North West, Midlands and Yorkshire are forecast to follow closely behind with 4.5% growth. And these regions are expected to lead the way in the coming years.
The North West in particular is expected to see especially strong house price growth over the next few years. Savills forecasts house prices to rise in the region by 6% in 2022, 5.5% in 2023 and 2024 and 4.5% in 2025. This adds up to a whopping 28.8% rise across the five years to 2025.
This is predicted to be the most substantial house price growth across the UK. And at the same time, London is forecast to only see a 12.6% rise in house prices, which is well below the UK average.
What is causing this growth in the North West?
The North West is slated for strong investment and development in the coming years. This, paired with the government’s plan of levelling-up the UK, will bring forward more investment in infrastructure to the region.
Lucian Cook, head of residential research at Savills, says: “The Government’s levelling-up agenda is likely to support the patterns of regional price growth we would normally expect at this point in the cycle.”
The North West has been home to a thriving property market in recent years. And since the announcement of the stamp duty holiday in July 2020, the North West saw particularly strong demand and house price increases. In December 2020, house price growth reached a decade-high in the North West with a 5.4% rise year-on-year, according to Zoopla.
What does this mean for Manchester?
This strong house price growth slated for the North West is expected to hit Manchester. According to Zoopla’s latest House Price Index, Manchester saw the second strongest annual house price growth out of UK cities with a 6.3% year-on-year increase in January 2021.
This growth and demand is making it an especially exciting time to buy property and invest in Manchester. And with a number of exciting high-quality residential property developments being brought forward in the city, this will help keep up with the growing demand.