Historically, there was a very clear gap between the North and South of England in terms of the house price growth. However, that has all changed, and property investors are increasingly looking to take advantage of the huge investment opportunities in the North.
According to the ONS UK House Price Index, in the year up to September 2021, London house prices increased by 2.8%. In the same period, house prices in the North West grew by a substantial 16.8%.
There are a number of factors that are driving this increase in house prices and demand for property in the North:
Impact of COVID-19 on property demand
Since the start of the COVID-19 pandemic, there has been a shift in housing demand, with high volumes of London residents opting to move out of the capital. Due to the lockdowns and other restrictions, people are looking for properties that offer more space and outdoor land or are situated near to scenic areas.
With the increase in people working from home, many professionals also want to have room for an office and they also have more flexibility to work from any location, rather than working in London offices.
Additionally, many home movers are searching for properties in areas that can still provide them with a similar offering to the London lifestyle, such as city centre nightlife and entertainment.
This is why cities like Liverpool, Manchester and Birmingham are becoming the top choice locations for professionals. They are cities famous for their culture and entertainment offerings, from sports events to music venues.
With these parts of the North benefitting from large volumes of investments and regeneration projects, the appeal of lower living costs and a thriving local economy make them ideal locations for people moving out of London.
Lower property prices
Despite areas like the North West seeing such a high increase in house prices, properties still cost significantly less than buying in London, on average. The average house price in the capital at the end of 2021 was just over £675,000, while the average house price in the North West was £233,000.
Due to this, it is easy to see why so many property investors are moving quickly to invest in these thriving areas of the North.
Major corporations moving North
It is not just property investors and residents who are benefitting from the lower property prices in the North, many corporations have moved the offices to northern cities to reduce costs. Reports showed that average office rent prices in London are around £50 per square foot, while the average in Manchester is £30 per square foot.
Amazon recently opened a head office in Manchester, while Media City, also in Manchester has welcomed the BBC & ITV. Leeds has become a hub for tech start-up companies, while in Liverpool, the banking, finance and insurance sectors have been the fastest growing areas of the city’s economy. The digital and creative sectors have also been growing in numerous northern cities.
Regeneration and capital investment in the North
There has been a significant amount of investment made in areas of the North, with some large-scale regeneration projects. The example of Peel Holdings investing £5.5 billion on The Liverpool Waters projects across the L3 postcode shows how confident investors are in the thriving areas of the North. Areas that were once derelict and unsightly are becoming stunning, modern areas of the country with vibrant communities, high spec accommodation and excellent amenities.