The story across London remains positive, with some Central London areas still offering good value despite high prices and a number of Outer London locations showing particularly high potential for strong returns as price growth ripples outwards from the centre of the city. The UK capital’s population has just surpassed its 1939 peak of 8.9 million, and is now expected to continue on this trajectory to reach some 11.3 million by 2050, while the city remains up against a housing shortfall that is a distance short of demand.
The end of 2014 saw a small slowdown in growth, but this should be taken in the context of an average price increase of 11.1% across the year as well as uncertainty over Stamp Duty and Mansion Tax proposals and the inherent caution typical in the lead up to an election.
Forecasts still put future growth at 22% to 2019, while certain areas can expect strong outperformance as Crossrail, significant regeneration work and strong town economies across the city boost demand. Look out for places such as Ilford, Lewisham, Sutton and West Drayton over the coming years for excellent performance.
The key to the UK’s forthcoming GBP7 billion “Northern Powerhouse” investment is poised to deliver excellent investment returns for property investors over the coming years. The economy of the country’s established second city is thriving, with a vibrant creative, digital and new media sector attracting the likes of the BBC and Google, while financial and professional services now contribute 21.2% of the city’s GVA, with 65 of the FTSE 100 companies having now established a presence in Manchester.
Property is already rising quickly, with the 10.4% year-on-year increase to Q4 2014 outperforming London across the same period. This growth will continue, with forecasts of 22.2% to 2018 widely considered too low
and prices are still around 18% below peak. The increased demand that a population expected to rise by 128,000 over the next decade will create will not be met by the city’s construction pipeline over this period.
Across 2014 just 212 new residential units were delivered, and a further nine schemes will add 1,426 new units over the next year, which represents a fraction of what the city requires.
Work to regenerate one of Berkshire’s foremost economies continues apace under the GBP450 million Heart of Slough masterplan. Now worth more than GBP2.5 billion to the UK economy and home to more European corporate headquarters than any other UK city, Slough pulls in almost 40,000 commuters every day to its many business enterprises, while almost 32,000 take advantage of the town’s convenient location to commute outwards, many into Central London.
Property market gains are already being seen in Slough, with average prices up 16% year-on-year to Q3 2014, while predictions put future growth at up to 60% by 2021 given the coming arrival of Crossrail. A notable development for investors in Slough is the effect of the recent changes to UK Stamp Duty, as London commuter belt purchases in places such as Slough where prices fall within the GBP275,000-350,000 range will see the most savings under the new system.