As we knock back a mulled wine this December, we can also enjoy looking back on what has been a positive year for the UK property market, with price growth recorded in many parts of the country. Despite mansion tax concerns and General Election worries putting the brakes on property sales to some extent, the fundamentals remain stable, according to property guru Phil Spencer.
‘The fundamentals of the market are absolutely fine. By that, I mean the basic things that control the marketplace, whether it’s the economy or employment,’ says Phil. ‘The price differential at the beginning of this year showed the greatest difference there has ever been between London and traditional commuter zones. That’s closed up a bit, but the research [from Savills] shows that the Midlands and the North are now benefiting from people moving out of the more traditional commuter zones. It’s like a delayed domino effect, and it’s interesting to see which markets follow which,’ continues the property expert.
We take a look at several of the UK’s most promising property markets for 2015.
Cheshire
Situated in the North West of England, Cheshire is home to some of the highest value housing markets outside the South of England. The recent growth of prime property prices in Cheshire is down to local demand, according to Savills, with two thirds of new buyers originating from the North West of England. The county is also attracting buyers from London and the South East, in addition to international buyers and expats. The region’s diverse employment sector is also driving property prices up, with Manchester, Liverpool and Chester all within commutable distance.
Aberdeen
Following the Referendum, Scotland is likely to see the strongest increase in property prices across the UK, reported Savills. Since the Referendum, a rise in buyer interest across Scotland’s prime market provides evidence of a steady recovery, with property in Aberdeenshire leading the way. A 43 percent annual rise in activity across Scotland’s prime residential market backs this up. In the combined mainstream market, property prices and sales in Aberdeen are 25 percent greater than the 10 year annual average.
Surrey
According to Savills, the market in South East England is likely to be the strongest performer over the next five years. The market for new build property in the region is extremely positive, with certain developments near Guildford reaching as much as £500 per square foot in value. Demand for new homes in the area is being fed by local down-sizers seeking more modern properties with lower maintenance costs, in addition to London buyers moving out of the capital. Interestingly, 90 percent of buyers believed that moving out of London would enhance their quality of life, according to Savills’ Spring 2014 Prime Regional Survey.
York
An increasing number of property buyers across the UK are beginning to favour cities including Cambridge, Bath and Edinburgh. The northern city of York is also sitting pretty among these flourishing urban locations. Average property values in York have grown by 4.6 percent over the past year, double the rate of prime property growth in the rest of the North and the Midlands. Across York and the surrounding region, the number of homeowners registering interest in buying property has increased by 29.9 percent.
London
After a hot spring and early summer, July and August saw London’s frantic property market lose some momentum. According to a report by property consultancy firm Savills, price growth in London’s prime markets rose by only 0.5 percent in the third quarter. In the words of Lucian Cook from Savills’ research department, ‘On affordability grounds alone, there is limited capacity for house price growth in the mortgaged part of the London market over the next five years … At the other end of the scale, there is more capacity for price growth in the North East, though the economic drivers for it are realised to be weak. Against this context, we expect the South East to see the highest levels of house price growth over the next five years and London the lowest, with buyers priced out of one moving to the other.’
A Word from the Expert
Despite the fact that property markets across the UK are now picking up after the recession, Phil Spencer still has some concerns: ‘The basic drivers of the market are perfectly healthy, but we have a massive problem with supply and demand. The annual target to build new homes is 240,000 per year, but there’s going to be a 20 percent shortfall on that number. In fact, there’s always a shortfall on that number. The longer the problem goes on, the greater the problem becomes, and that means there’s a backlog.’
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