East Mids house prices to grow at twice the rate of London
Average UK house price growth is expected to slow to 14 per cent over the next five years, but there will be marked differences between and within regions.
Projections range from an average 18 per cent increase in the North West, closely followed by the East Midlands at 14.8 per cent, to just 7 per cent in London between 2018 and 2022, though the capital’s prime markets will show stronger growth, according to new forecasts from international real estate adviser, Savills.
In London, average house prices – at £479,100 in August 2017, according to the Land Registry – are 12.9 times the average individual’s earnings. The capital’s market has therefore become increasingly accessible only to more affluent, dual-income households, which will restrict potential future growth in the capital, and in turn act as a drag on its commuter belt.
In the East Midlands, house prices are relatively modest compared with incomes, with the average house price of £177,825 being around 6.2 times the average individual’s annual earnings. Coupled with a robust economic outlook and strong rail links to the capital, this will underpin the region’s housing market.
Chris Charlton, head of residential sales at Savills Nottingham, said: “The predicted five year increase shows the continued strength of Nottingham and the wider East Midlands market. Over recent years we have seen more buyers moving to the area from London and the south east as the excellent transport links into London from the likes of Newark and Grantham make it possible to live in the Midlands and work in the south.
“Hotspots with easy access to Nottingham city centre continue to attract strong demand with good growth prospects over the next few years including Edwalton and more recently, the Beeston and Bramcote markets have shown significant improvement particularly following the completion of the NET transport link.
“The investment market within both the city centre and suburban areas has also shown continued growth despite the higher tax regime and the competition from first time buyers.”
Mainstream house prices – 5 year forecasts:
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
5 year 2018-2022 |
|
| UK AVERAGE | 2.0% | 1.0% | 2.5% | 5.0% | 2.5% | 2.5% | 14.2% |
| North West | 3.0% | 1.5% | 3.5% | 6.0% | 3.0% | 3.0% | 18.1% |
| North East | 2.5% | 1.5% | 3.5% | 5.5% | 3.0% | 3.0% | 17.6% |
| Yorkshire & Humberside | 2.0% | 1.5% | 3.5% | 5.5% | 3.0% | 3.0% | 17.6% |
| Scotland | 2.5% | 1.5% | 3.5% | 5.0% | 3.0% | 3.0% | 17.0% |
| Wales | 2.5% | 1.0% | 3.0% | 5.0% | 3.0% | 3.0% | 15.9% |
| East Midlands | 5.0% | 1.0% | 3.0% | 5.0% | 2.5% | 2.5% | 14.8% |
| West Midlands | 5.0% | 1.0% | 3.0% | 5.0% | 2.5% | 2.5% | 14.8% |
| South West | 5.0% | 1.0% | 3.0% | 4.5% | 2.5% | 2.5% | 14.2% |
| East Anglia | 2.0% | 0.5% | 2.5% | 4.0% | 2.0% | 2.0% | 11.5% |
| South East | 2.0% | 0.5% | 2.5% | 4.0% | 2.0% | 2.0% | 11.5% |
| Greater London | -1.5% | -2.0% | 0.0% | 5.0% | 2.0% | 2.0% | 7.1% |
