"The best, most astute property investors are wise to the fact that when price growth stutters in one city, it will be booming in another, so a smart investor who normally invests in Manchester will have shifted their attention to Sheffield, for example, for the past couple of years"
- Jason Ferrando - easyMoney
In December 2021, the Bank of England tried to stem soaring inflation by increasing interest rates. In the months and years since then, Britain’s property prices have stuttered. While the market hasn’t crashed like many predicted it would, nor has it managed to demonstrate much in the way of positive growth.
To understand how these factors have impacted the profits of British property investment, new market research by peer-to-peer real estate investment platform, easyMoney, analysed average house price growth data in Britain across 15 major cities between December 2021 and today (latest available data from May 2024).
According to the data, in December 2021, the average house price in Britain was £269,273. Today, the average stands at £288,120, marking a growth of 7%.
However, there are a number of major cities where, despite the significant economic headwinds, prices have seen impressive growth since the end of 2021 and have, therefore, become Britain’s property investment hotspots.
Nowhere is this more true than in Sheffield. In December 2021, The Steel City had an average house price of £192,542. Today, the average stands at £216,934, marking a strong growth of 12.7%.
Bradford has seen price growth of 10.3%, resign from £158,562 to £174,930; and another Yorkshire city, Leeds, ranks third for price performance with growth of 10% since December 2021 bringing the current average house price to £231,743.
Newcastle (9.9%), Leicester (9.5%), Bristol (9.4%), Edinburgh (9.1%), Cardiff (8.8%), Glasgow (8.7%), Nottingham (8.5%), and Liverpool (7.7%) have also seen above average price growth.
But not all cities can boast such strong price growth since the end of 2021.
In fact, some of the major investment cities have particularly struggled, including London and Manchester, both of which have seen growth of just 2.3%.
Brighton has seen growth of 4.5%, while Birmingham prices have risen by 5.4%.
Jason Ferrando, CEO of easyMoney says: “When the Bank of England started increasing interest rates at the end of 2021, it made property purchasing more expensive for the vast majority of people who require the help of a mortgage. This includes property investors of all shapes and sizes. And because buying became more expensive, fewer buyers entered the market and this fall in demand means prices have struggled.
"But as is always the case with the British housing market, even when the national picture shows muted growth, there are always corners and pockets where prices are rising at pace. In the past few years, the best of these pockets appear to have been Yorkshire cities.
"The best, most astute property investors are wise to the fact that when price growth stutters in one city, it will be booming in another, so a smart investor who normally invests in Manchester will have shifted their attention to Sheffield, for example, for the past couple of years.
"If you’re looking to make good returns from property investment, it’s vital to have a good overview of the national market and all of its individual local markets, too.”
