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West Midlands Property Prices Up 7%

Property prices

Despite the drag that London and the South East has been having on average UK-wide property price growth, Halifax data just released demonstrates that it is very far from doom and gloom across the rest of the country. The UK’s biggest mortgage lender is uniquely placed to have strong insight into residential property prices and the house price index is produces with data company IHS Markit is a closely watched bellwether.

Anyone reading headline figures on lengthening sales times, low numbers of transactions and sluggish price growth would be forgiven for thinking that the UK property market is in a bit of a trough at the moment. The reality is more a divergence between regions and even different areas of the same city, especially with regards to London.

Because, some locales apart, the more densely populated South East, particularly the higher end market for more expensive properties, has seen a slowdown or drop in prices, this has a strong influence on UK averages. But it is clear these averages don’t show the whole picture.

It’s been well documented that the Midlands and more northerly regions of the UK have been attracting landlords in search of investment properties still offering strong returns over the past year or two. This migration north would appear to be vindicated by the Halifax index’s data showing that property prices in the West Midlands, which includes Birmingham, have risen by 7% for the second quarter on a year-on-year basis. Scotland and Wales were the regions with the next best performance, though both were still some way behind at 3.2% price growth.

The main drivers boosting Birmingham and the surrounding region are considered to be the inward investment the upcoming HS2 high speed rail connection to London is attracting and the fact the affordability ceiling hasn’t been hit in the way that appears to be the case further south. However, even in the north there is significant divergence between regions. Prices fell 3.2% in Yorkshire and the Humber and 2.6% in the north of England. However, with the HS2 extension to Leeds confirmed, investors might expect a similar impact on property prices in Yorkshire to eventually take hold. The high speed line to Birmingham is expected to be operational by 2026 but Leeds will not be reached until around 2032. That could be seen as an opportunity for long term investors assessing investment properties.

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Paul

The author Paul