Manchester, Edinburgh and Birmingham set to be property hot spots of 2017
Property price growth is likely to be subdued in London with bigger regional cities in the UK expected to outperform the capital city, according to a new analysis report.
Overall residential price growth of 0.5% is forecast for the UK, rising to 1% in London but the prime property market in the capital is set to be flat, according to the report from real estate advisors JLL.
Very little house price growth is expected over the year as the country absorbs Brexit uncertainty and knock-on impacts to consumer price inflation and affordability, which is already stretched, the report suggests.
But it adds that there will be hotspots such as Manchester, Edinburgh and Birmingham and points out that Manchester city centre has experienced weak supply levels over the past few years, pushing up prices and rents by around 15% and 11% respectively in 2016 with little relief expected in 2017.
In Edinburgh, the suburban family homes markets are all seeing strong demand while Build to Rent in the city centre and towards Leith is taking shape. Birmingham, beneficiary of the first big Housing Growth Fund investment into 2,000 new homes, is also finding renewed attention after having been overlooked by large scale residential investors in favour of Manchester coming out of the downturn.
The report also predicts that new build starts will hold at just below 2016 levels across the UK as a whole but will fall dramatically in London even although need is most acute in the city.
‘Legislative changes, such as stamp duty, and the uncertainty around Brexit have led to weaker investment demand from overseas as well as domestic buyers. Alongside an overstretched owner occupier market, this will keep a lid on price pressure,’ said Andrew Frost, leader director of UK residential at JLL.