In the last year or so, it seems that we have constantly seen the same positive narrative when it comes to UK property. UK house prices have been skyrocketing and we have seen an unprecedented amount of activity in the market, which doesn’t seem to be shifting any time soon.
May was no exception to this – according to the Nationwide, property prices in the UK have seen an incredible increase of 10.6% in the last year, which is the largest annual growth in seven years. On top of this, Nationwide has also predicted that the market will remain buoyant for at least the next six months. The high demand in the market has been attributed to many factors, but on this occasion, the Nationwide has credited this immense rise in activity to the ‘race for space’, which is a phenomenon that has occurred since the pandemic where people are choosing to migrate out of urban areas in favour of rural locations.
So, which areas of the country have seen the strongest growth in property prices? A number of regions have seen house prices rise dramatically, this is especially the case in more rural and Northern areas. In Rightmove’s monthly house price index, each region in the UK had recorded an appreciation in their house prices to some degree. It was found that Wales lead the way in house price growth, with the region seeing an impressive increase of 13% in the year to May 2021. This was closely followed by the North West (11.1%) and Yorkshire and the Humber (10.5%). There continues to be an imbalance of supply and demand in these areas, where people are more likely to move locally and could probably afford to upsize if they wish.
In separate research carried out by the Estate Agents Kellar Williams that looked at market performance in each of England’s ceremonial counties since July 2020, it was found that counties in the East Midlands saw the highest rate of growth in their asking prices. Leicestershire lead the way with a 22% increase since July, and this was closely followed by Lincolnshire, which saw an increase of 21%. Other regions that performed well in the research by Kellar Williams included North Yorkshire, Derbyshire and Wiltshire.
While both sets of data have delivered very different results, they both seem to reflect the Nationwide’s theory that homebuyers are favouring less populated areas in the search for more space and affordability. That being said, there is still a huge appetite for inner city living; as the 21st of June is rapidly approaching and we’re returning to pre-pandemic life, more people are returning to the cities for work and social purposes. This is particularly the case with renters – according to data from Zoopla, rental demand in inner city areas have started to increase and rents in these areas saw an increase of 3% in the year to the end of March. This is expected to grow even further over the summer months as more young people move out of their family home into their own or shared accommodation in city centre locations.
It’s clear by now that the strong appetite for UK property we have seen in the last year is no fluke and it certainly isn’t going anywhere any time soon. This is great news for investors who are looking to either expand their portfolio or offload some properties.
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