Savills property group has forecast that the north-south value gap will continue to shrink over the next five years according to its latest industry forecast.
Part of its five-year prime and mainstream residential forecasts, the narrowing of house prices between regions could see prices in areas such as the North West and Yorkshire and The Humber increase by 18.8%.
However, house prices in the South aren’t suspected to rise so steeply. Prices are predicted to increase by 13.1% in the South West and only 10.4% in the South East and East of England. A rise of only 5.6% across the next five years is predicted for London, with the major changes forecast for 2022/23.
While the increase will not see the North competing with the prices in London any time soon, it could see the average house price reach £270,000 in parts of the North should Savills’ predictions turn out to be true.
London on the other hand will continue to offer good value for money and will benefit from an interest in overseas demand, likely due to increased travel internationally with the easing of travel restrictions.
This follows falling house values in some of London’s most elite postcodes and a seven-year slump, where house prices fell more the 20% in those locations. The renewed demand has seen recovery in locations such as Notting Hill and Holland Park.
The pandemic and the new work from home culture that has become the norm will also have a continued impact on the property as Frances Clacy, research analyst at Savills explains: “Beyond London, Savills expects to see changes in working patterns underpin demand in more rural areas further away from major employment centres, albeit to a lesser degree than over the past 18 months. In prime regions prices are expected to grow +4% next year, and +19.3% over the next five years.”
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