A new report from Jones Lang LaSalle has demonstrated that the average price of a property in England, Scotland and Wales will increase by 22.8% over the next 5 years.
The experts at JLL predict that the average house could rise in value by 5% in 2016.
Adam Challis, Head of Residential Research for JLL commented: “The whole housing market could potentially be more active. However, continued high moving costs despite lower stamp duty burdens for most, will provide some brake on transactions, as too will the lack of choice for buyers.”
A more stable economy, rising wages and a better outlook on jobs has sparked a flurry of activity in the UK’s real estate market. A positive outlook has overall injected more confidence among house buyers and property investors.
“Many owner-occupiers have deferred moving house over the past seven to eight years following the global financial crisis but with the outlook more positive and stable we expect at least some to seize the opportunity to move home, releasing pent up demand, as well as more stock, onto the market,” Challis continued.
House price growth
Analysts forecast that property prices will climb at their fastest rate in the South East of England over the next 5 years. Prices could jump by 26.4% by 2020 from the average cost of £256,737 to £324,540.
Prices in Greater London are expected to rise at a slower pace, with values expected to increase by 24% (up to £620,006).
Central London prices are expected to rise at the slowest pace with a 17% rise by 2020 and only a 1% rise in 2016 (5% lower than the average).
“We expect slightly lower activity and marginally softer pricing pressures during the second half of 2017, with international buyers and central locations more sensitive than domestic buyers and outer London submarkets,” Challis added.
It is thought that changes to Stamp Duty will have an effect on purchases over £1.5 million.
Where to invest now for the largest house price growth
According to the report’s findings, the most dramatic increases will occur outside of London in Bristol, Manchester, Leeds and Edinburgh.
If you are thinking of buying now, here are three of the best places to consider.
Widely referred to as the ‘Northern Powerhouse’ Manchester is home to the UK’s largest concentration of 24-30 year olds. Its prestigious universities, its large student population and its flourishing economy make it an attractive option for investment.
New-build schemes such as Experience Invest’s off plan development, Brunswick Street, will provide investors with a low entry level option to get onto the property market. The development comprises 2 and 3 bedroom apartments which will provide a 7% NET return per annum (assured for 3 years). Investment starts at £136,372.
Leeds, York and Harrogate are affluent areas in the Yorkshire and Humberside region. Affordability is key in these areas and properties provide ample scope for capital appreciation.
Victoria House is an off plan development in Leeds which is close to an area of regeneration in Leeds. Investors can benefit from a 20% off plan discount and will receive an 8% NET rental return per annum (assured for 3 years).
Edinburgh is an attractive location for graduates and has plenty of pulling power when it comes to attracting visitors to the city. Investors could benefit from a 19.3% price rise over the next 5 years.
As well as the anticipated capital growth, investors can enjoy rental returns from their property until they reach the right point in time to sell up and reap the rewards from rising property prices.