Traditionally the media likes to talk abut a North South divide. With higher income levels in the South of England. London in particular has traditionally offered jobs with higher salaries. Due to these opportunities property prices have appreciated far faster in the south compared to Northern towns and cities.
The London effect is particularly prominent with average incomes in London outstripping the UK average. According to the statistics, the average gross salary in London is £53,700 in 2021 (Plumplot 2021). In January 2022, the average salary survey reports that the average salary in London is £60,921 ($84,922 USD), while the most typical salary was £33,717 ($47,000 USD).
House prices in London far outstrip those found more than 50 miles outside the M25. According to Zoopla, The average sold price for a property in London in the last 12 months is £722,668.
However, we now find ourselves at a real turning point, with COVID changing the needs of many through home working, coupled with London’s evermore challenging living costs.
It’s tough to ignore the current cost of living crisis. People now have to decide if commuting is something they can afford whilst maintaining the usual creature comforts and a fast-returning social life.
Closing the gap
This shift closes the gap between North and South, as more people and businesses are looking to relocate to more affordable Northern cities. This trend will only continue with HS2 currently being constructed. This will make London far more accessible from the North so this trend of companies relocating will continue
According to the Office for National Statistics (ONS) in their UK House Price Index, there is a significant rise in investment by buy-to-let landlords and others in the northern market. Property investment companies such as Alesco, Solomon Investment Partners, Esper Wealth and Alliance Investments all focus on Northern powerhouse cities due to the current trends.
The ONS noted that house prices in London climbed by 2.8% in the last year, whilst house prices in the North West increased by 16.8%.
So which cities offer the best opportunities?
Liverpool represents one of the most cost-effective locations in the United Kingdom, with some of the lowest entry levels in the region. According to recent research from JLL, average house prices in Liverpool are expected to climb by a further 21% by 2026, with a 6.3% average annual rental return. Over the previous five years, House prices have grown by as much as 20.6%, showing a strong trend for future growth.
The 17-29 age bracket is the fastest-growing group in the city, with many looking to move into their first home away from the family nest.
With £5 billion worth of investment going into the Liverpool Waters project, the scheme should deliver over 17,000 jobs to the area boosting the economy and local house prices. More than ever, it would seem now is the right moment to invest in Liverpool.
For the last 15 years, Manchester has seen incredible growth and success. Investment from across the globe has created thousands of jobs, helping boost commercial interest in the city, creating one of the largest property booms anywhere.
The city is an attractive market in its perfect balance of location, local infrastructure and affordable prices. Standing as arguably the connective hub of the North, Manchester often features as the first stop on most journeys across the region.
The city also benefits from a rich industrial revolution history, trendsetting music and sporting greatness. These fundamental elements make it easy to recognise and confident in its continued success.
One of the largest property portals (Zoopla) has indicated rents across the city are still rising, with prices hitting a 13-year high of 8.3% in the final three months of 2021. With demand still outstripping supply, this trend isn’t going away anytime soon.
For further information contact M1 Estates today.