Homes in the Capital Losing Out to the Rest of the Country

The UK property market has been changing rapidly over recent years, even months. The once strong London property market has been increasingly affected by Brexit and a drop in buyer confidence in the capital. As London property prices shrink, their Northern counterparts are growing, meaning that homes in the capital are losing out to the rest of the country.

Some regions of the UK have performed well in terms of house price growth and London continues to lose out to more profitable regions in the North. The fall in London house prices highlights just how well other areas in the UK are performing, despite Brexit uncertainties and a nervous market. House prices in the UK rose by 3.5% in the year to September, which was up from 3.1% house price growth in August. Though growth across the UK isn’t at an overwhelming level, it is definitely positive, unlike London.

In 2018, London has proved to be the most troubled region in the country in terms of property price growth. London house prices have seen an annual fall of 0.3 per cent in September according to the government’s official ONS House Price Index.  With some cities like Liverpool, Birmingham and Manchester experiencing house price growth above 6% per year, London is becoming a less attractive location for capital appreciation, something it once was famous for.

However, these price falls don’t mean that London property is affordable by any stretch. London’s properties range from tiny apartments to luxury penthouse suites at the top of skyscrapers to gigantic mansions. Many of these have asking prices in the region of £15 million and above. A lavish flat in Regent’s Park will still cost you £15.95 million, a mock Tudor home with passenger lift in Knightsbridge will cost you £20 million and a townhouse in Belgravia would cost a staggering £55 million. So despite the decline in general property prices in London, they are still unaffordable for most. For many renters, the cost of living in London and the high monthly rent is driving them to the North too, with far better prospects available in cities like Manchester and Liverpool. This is leading to further fall in demand for London rental property.

The fall in London house prices has also affected the UK buy to let property market, with many landlords choosing the North for higher rental yields and lower property prices. UK property investment companies like RW Invest have witnessed a huge change in where investors are looking for new buy to let properties. Several potential investors are deciding to consider property in the North. When looking for rental yields, properties in the capital can’t compare to their northern counterparts, because house prices are just so high.

Another factor is the government’s Northern Powerhouse initiative. It was set out to address the historic north/south divide in the UK and this has played a key role in shifting investors’ attention northwards. With booming cities like Leeds, Manchester, Liverpool and Sheffield increasingly attracting international investment, London continues to lose out while the rest of the UK, once hidden behind the capital’s shadow, flourishes.

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