North West house price growth forecast to be highest in UK

House prices in the North West are forecast to grow faster than in any other UK region over the next five years.

Projections by property agents Savills suggest an 18% growth to 2022, two-and-a-half times the rate of growth expected for London.

Overall the UK is forecast to see 14% growth over the period. However UK house price growth is expected to slow next year as uncertainty weighs on sentiment, according to the research.

A return to growth is expected in 2019-20, assuming employment, wage and GDP growth swing back towards trend levels, though this will be tempered by interest rate rises.

“Uncertainty over what Brexit means for the UK economy and how it will impact household finances will increasingly act as a drag on house prices,” says Lucian Cook, Savills head of residential research.

“There is capacity for growth once we have greater clarity, but this will be constrained by rate rises and the corresponding ability to get mortgage debt, particularly in London and other higher value locations.”

Charlie Kannreuther, head of residential at Savills Chester, highlighted the strength of areas in south Manchester and Cheshire and said: “There is also strong demand in the prime market in perhaps less obvious areas. One of the highest residential sales in the North West this year for example was a property near Blackburn which sold above its £3.5m guide price.

“In spite of this, the buoyancy of certain markets masks large regional variations, where some areas which in the past have been reliant on traditional industries continue to struggle.”

This divide exists in all regions but is especially marked in London, where its prime markets are forecasting growth of 20% over five years despite the city expected to see average prices fall to 2019.