Those who follow the UK regional property market will not be surprised to learn that the performance of these markets has been mixed to say the least. For some time now the London property market has been dragging the UK higher although a recent pause in this market will have a short to medium term impact on the overall UK property market. So, which areas of the UK have been performing better and which are still struggling in light of the recent financial crisis?
It will be no surprise to anybody to see Greater London having recovered quickest since the financial crisis. London property prices have increased by 35% since the crisis and while there is a slight wobble at the moment in light of Brexit this performance is still head and shoulders above anywhere else in the UK. The south-east of England has also performed admirably with an increase in property prices in excess of 20% over the period in question. Again, when you bear in mind that the south-east of England is seen as the heartbeat of the UK economy this will come as no surprise.
Property markets in East Anglia and the south-west of England have also been relatively good performers since the financial crisis. East Anglia prices have increased by around 15% with the south-west of England seeing an improvement of just under 10% in property prices. These are by far and away the better performing markets in the UK since the US instigated economic crisis.
While the south of England and London tends to grab the headlines it is worth noting that house prices in the West Midlands and the East Midlands are fractionally above their pre-financial crisis highs. The North West of England as well as Yorkshire and Humberside are slightly down on the historic highs but these markets have clawed their way back after the debilitating economic downturn. It may be that we are starting to see signs of a long-term recovery in markets in the Midlands and the North of England but time will tell.
Despite the fact that property prices in Northern Ireland have started to show at least some signs of stability, prices are still 40% below their pre-crisis levels. There is no doubt it has been a long hard struggle to even maintain current levels in Northern Ireland but hopefully a recovery should be forthcoming. The performance of other areas of the UK is also been relatively mixed with Wales down about 8%, Scotland and the North of England have both fallen by around 9%. These are areas of the UK which are often highlighted as having good long-term value although unfortunately there are no signs of renewed investor interest at the moment.
As we have seen over many years there are areas of the UK property market which perform very differently to their counterparts. London and the south of England have always performed admirably especially when compared to markets in the Midlands and North of England. There is no doubt that London has dragged the UK property market higher from an “average house price point of view” but even that market is currently treading water in light of the Brexit vote.
On a brighter note, some areas of the UK are now offering relatively high rental yields which would add a strong backbone to any property portfolio. Many experts see potential for long-term growth in the UK property market but we need to overcome the hurdle that is Brexit and the uncertainties which this has unearthed.