Prices from £120,000Learn more
Join CityClub Today to Receive:
Navigating the Current Market
House prices are dropping in response to the current UK mortgage rates. The BOE dramatically increased the Base Rate a few months ago to combat inflation, attempting to bring it down from its current rate of 8.7% to just 2%. This rise has concerned the property market, with some fixed mortgage rates reaching 6%. Due to this climb, homeowners may decide to sell and push prices down, opening the door for BMV property opportunities.
The rise of mortgage rates appears to be slowing, close to reaching its peak and likely to return to the 4-5% window in autumn. Such high-interest rates, though, mean that house prices are dropping to accommodate and counter-balance buyer demand. Due to weaker demand and rising supply, house price growth has slowed down dramatically. Property prices in the UK have reduced to just a 0.6% year-on-year rise, compared to June 2022’s 9.6% increase. However, according to Zoopla, prices are still on track to be 5% lower over 2023.
London is the first region so far to see house prices dropping, with its YOY property prices decreasing by 0.6% this month. However, even with this drop, average house prices in London remain above £520,000 against the UK’s £261,500 average as of June 2023. This buying price, along with renting, still equates to at least half of the standard income. In comparison, property and rent prices in the North of England can reach a third of a buyer’s or tenant’s income at the most, making it home to some of the best buy-to-let locations in the UK.
Investing in the North of England
It is no secret that the South of England is one of the most expensive places to live in the UK. The South East in particular is the only region to have experienced a gentle decrease in rental yields, dropping by 0.2% over the year to now sit at an average of 4%. London itself sits with an average of 4.7% for rental yields and Yorkshire and the Humber 4.9%. It is the North West which currently offers the best yields in England at 5.5% and the best-performing yield increase of 0.34% from over the year.
The North West property market is resilient and shows remarkable promise for such. House prices currently average at £211,790 and rent at £887.73pcm. The region is ranked third on the UK’s House Price Index for the rising value of properties, seeing a rise of 2.7% between May 2022 and May 2023 compared to the average 1.7% increase. Even with house prices dropping, the North West is expected to continue its resilience through the current UK mortgage rates, thanks to high demand and the best rental yields in England.
£211,790Avg. North West property prices
£887.73Avg. North West rent
5.5%Avg. North West rental yield
£156,300 Average House Price | 5.4% Yields
Property prices in Liverpool are some of the lowest in the country, but demand and rental income mean that investors can get more for their money. Being home to some of the top regeneration projects in the North and hosting the 2023 Eurovision, too, the popularity of the region and its desirability is constantly growing.
The city’s regeneration projects total £7 billion in investments to improve and provide new housing, workspaces, and green spaces across the region, not just the centre. Because of this, the best areas in Liverpool range from the city centre to the suburbs. With constant improvements in the works, it is no wonder how Liverpool has blossomed into one of the fastest-growing property markets – five times the rate of London. Liverpool will continue to attract businesses and see demand from specialists and families alike as projects near completion.
£210,200 Average House Price | 6.5% Yields
Due to businesses like Channel4 moving its headquarters here and impressive regeneration projects expanding the city centre and improving transport links, Leeds is currently one of the most exciting buy-to-let locations in the UK. An increase in quality tenants, property prices, and an annual rental price rise of 11% last year followed Channel4’s relocation, boosting Leeds’ economy and desirability. This is only forecast to grow while projects are completed and connectivity to and within the city improves.
The suburbs and towns are some of the best areas in Leeds, proved popular with neighbourhoods and families. However, with the influx of businesses migrating to the city and five universities, these areas are now seeing demand from students and young professionals, too.
£220,300 Average House Price | 6% Yields
Over the years, Manchester has become London’s biggest rival. From its growing popularity, 20,000 people are forecast to relocate to the city over the next three years, respectively causing a predicted growth of 23.5% in property prices and 18.2% in rent between 2022 and 2025.
Being London’s main contender, with city centre rent reaching an average of £1,409pcm, the outskirts of the city are some of the best areas in Manchester for both living and the buy-to-let market. 54% of tenants have even relocated to its commuter towns and suburbs, making this an excellent option for migrating businesses and residents to the city who are attracted by Manchester’s growing reputation.
House prices may be dropping but, even with the predicted 5% fall over this year, prices will remain 15% higher than from the start of the pandemic in 2019.
Rising rates may be causing concern, but house prices will drop before they climb again, which leaves room for rent to increase in value to accommodate. Because of this, buyers who can afford these higher rates can take advantage of this and reap all the rewards by investing in the right locations and the most rewarding properties. Even at 5.5% fixed mortgage rates, buying is still more affordable than renting in many low-value property markets. This is great news for first-time buyers, whether investing or looking for their new home.
With property prices in the Northern Powerhouse already far lower than the national average, house prices will continue dropping in these cities and generate even greater yields.
Best Cities in Yorkshire for Property Investment
We have already established Yorkshire as a prime investment spot for property with fantastic capital growth potential. From its skilled sectors and...
House Prices 2024 | UK Property Market Outlook
In Zoopla’s UK property market outlook, house prices in 2024 will continue to drop to adjust to mortgage rates. However, if mortgage rates...
Best Rental Yields UK
Rental yields help investors decide whether a property is profitable. It is calculated as a percentage and is determined by the cost of the property...
Why Invest in Yorkshire Property?
Yorkshire offers more than just idyllic countryside. It has seen substantial growth in recent years and has become one of the most sought-after...