Property hotspots: Where to buy in 2017
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Picking future property hotspots can always feel a bit like a lottery. But it is not impossible.
“Historically, prime central London has been the primary driver of national house price growth,” says Stephanie McMahon, Head of Research at Strutt & Parker. “But 2016 has seen the capital being outperformed by other locations, notably the outer metropolitan area of London and East Anglia. This trend is expected to continue in 2017.”
Barnet in North London – where transactions in 2016 rose by six per cent, according to data from Savills – is a good example of an area worth watching. Others include Barking & Dagenham to the east and Sutton to the south.
The commuter town of Basildon is also starting to have the look of a good investment. Prices there increased by a fifth in the last 12 months, one of the highest figures in the country.
Away from London, there has been a lot of focus from experts on the East of England, rather than the traditionally more popular South East and South West. Savills expects that, over the next five years, house prices in the East of England will increase by 18.7 per cent, while prices in London will increase by 10.9 per cent and the whole of the UK 13.1 per cent.
But the agent warns: ‘The myriad of possible Brexit outcomes means there are numerous divergent scenarios for the economy, which have the potential to affect the outlook for house prices.
‘If consumer confidence holds up through 2017 and job losses are muted, house price growth could occur earlier in the forecasting period. This would leave markets more susceptible to an affordability squeeze when interest rates rise.’
Infrastructure improvements tend to go hand in hand with rising property prices. Anyone looking for areas ‘on the up’ is always well advised to keep an eye out for new stations/routes in the pipeline.
The soon-to-be-completed Crossrail route across London is likely to benefit areas such as Maidenhead and Slough to the west and Docklands, Brentwood and Abbey Wood to the east.
In the longer term, HS2 is also going to rewrite the property map of Britain, with one of the main beneficiaries likely to be Birmingham. House prices in Britain’s second largest city lag well behind London, but with little price growth expected in the capital in 2017, Birmingham is widely expected to narrow the gap this year.
The government has also recently announced £110million for an east-west rail link between Oxford and Cambridge, which can only benefit house prices surrounding the two universities.
At a time of political uncertainty, areas which have not traditionally been the target for smart money are now starting to come into play. There is major regeneration work afoot in Liverpool and, although it has been slower than the South East to recover from the property crash of 2007, it could be about to make up for lost time.
And if the big towns and cities continue to be the main focus for investors, we should not forget the old English favourite – the seaside. “Buy on the Kent coast,” advises Edward Church, Head of Strutt & Parker in Canterbury. “It has seen some of the highest price growth in the last two years and will continue to do so. Seaside properties in Kent trade at a premium of at least 50 per cent above similar properties inland. Improvements are happening in Folkestone and Hythe, which are attracting developers to the area, while Ramsgate and Broadstairs will continue to be hotspots, thanks to anticipated upgrades in rail links.”
One way or another, 2017 looks set to be another interesting year but overall transactions are expected to remain lower than those seen in 2016.
Simon Rubinsohn, Chief Economist at the Royal Institution of Chartered Surveyors, said: ‘Although recent announcements by the Government on housing are very welcome, the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents.
‘As a result, the affordability challenge will remain very much to the fore for many. Meanwhile, the lack of existing inventory in the market is impacting the ability of households to move and will contribute toward transaction activity over the whole of 2017 being a little lower than in 2016.’
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