S Poddar
Homeowners in the UK, particularly those in the Midlands, northern England, and parts of Scotland, are likely to see a welcome boost in property values in the coming weeks. A leading property expert believes that house prices will go up in February and March, with these regions being the ones that will benefit the most. This is against the backdrop of the UK housing market, which has been on the mend as prices have increased for five straight months.
Nationwide’s monthly monitor revealed that the average house in the UK now costs £268,213. While January’s 0.1% monthly increase was small compared with December’s 0.7% increase and November’s 1.2% increase, the broader trend is still upward. Nevertheless, the year-on-year rate of house price growth has eased a little from 4.7% in December to 4.1%.
Mishantha Liyanage, CEO of north-west based Mistoria Estate Agents commented on the current situation in the market: “As we step into February, the housing market continues walking very tight rope and has managed to increase property prices only by a minor margin while affordability issues refuse to go away, he said. Property prices stabilize, but affordability remains a key challenge. Some regions are faring better in terms of stronger buyer demand, while higher borrowing costs broadly limit purchasing power throughout the market.
Despite these challenges, Liyanage predicts that prices will rise in February and March across many regions, though not at the double-digit levels seen in previous years. He emphasized that the market’s trajectory will largely depend on how lending conditions evolve in the coming months, particularly with key policy changes on the horizon.
The 4.7 percent annual growth posted in December has been the most robust since the October 2022 level. Three regions have been projected as the most advantageous for the latest round of the price increases due to the increase. “Despite the overall market being constrained on affordability, property values in the Midlands, in northern England and many parts of Scotland will hold the stronger gain in February and March,” he said.
The Midlands, long regarded as a property hotspot, continues to attract buyers due to its relatively affordable prices compared to the south of England. Cities like Birmingham and Nottingham are seeing increased demand, driven by their growing economies and improved transport links. Similarly, northern England, including areas like Manchester and Leeds, is benefiting from significant investment in infrastructure and regeneration projects, making these cities more appealing to both homeowners and investors.
The other is Scotland, which is also coming out as a more important player in the property market. Places like Glasgow and Edinburgh are looking hot in terms of demand due to their lively cultural scenes and great job markets. All this seems to constitute a very positive price growth environment.
The outlook is positive for homeowners in these areas, but the broader market remains constrained by affordability issues. Higher borrowing costs, driven by rising interest rates, are making it harder for many buyers to secure mortgages. This has led to a more cautious approach among potential homeowners, with many opting to wait for more favorable conditions before making a purchase.
Despite these challenges, the housing market’s resilience is evident. The consecutive monthly price increases suggest that demand remains strong, particularly in regions where affordability is less of a barrier. For sellers, this could be an opportune time to list their properties, especially in areas expected to see the strongest gains.
Broader economic factors are also helping the UK housing market recovery. Though inflation remains a source of concern, growth in wages and a job market that remains relatively stable continue to help buoy buyer confidence. Further, policies to support first-time buyers and to increase supply should continue to add strength to the market through the rest of the year.
As conditions continue to evolve in the market, Liyanage is paying close attention to lending conditions and changes in policies. “With key policy changes on the horizon, pricing trends will heavily depend on how lending conditions evolve in coming months,” he noted. The implication here is that while this current outlook is positive, the market’s direction remains tightly tied to a mix of economic and policy considerations.
The upside is that for now at least the prospects for price rises in the near term are positive for property owners in the Midlands and northern England and Scotland. As with any market, however, one always has to be cautious as things can turn around quickly, so those looking to buy or sell will need to stay informed.
All in all, it seems the UK housing market is slowly picking up steam. With prices projected to increase in February and March, the regions with the greatest increases are likely to be the Midlands, northern England, and Scotland, as those areas still struggle with affordability issues. For sellers, it may be a good time to take advantage of the upward trend in the market, while for buyers, they may have to act fast to get properties in high-demand areas. As always, keeping abreast of the developments in the market and taking expert advice will be the way forward in this ever-changing UK property market.
