UK House Price Index - Recent Summary
According to the latest UK House Price Index, property values saw a subtle yet significant rise over the course of 2022, ending on a December average of £294,329 – an increase of over £21,000 from the opening January price.
Having closed the year with an average property value of over £26,000 more than the previous December, 2022 signified another healthy growth period for the UK market.
The summer months brought with them the most movement with a decrease in the average property price of 5.3% between May and June, before a significant 7.4% rise between June and July.
Regionally, the South East saw the biggest increase in property value (£29,185) between January and December 2022, with London not far behind with a rise of £25,760 between the start and end of the year.
Notably, however, property prices in these regions are well above the UK average, with London property currently valued at least £250,000 more than the rest of the country.
Of more interest to investors should perhaps be the more affordable Midland and Northern regions. The East Midlands, for instance, saw a rise in property prices of £24,292 between the start and end of the year, with property values peaking at £256,159 in December.
The North West performed similarly well with an above-average rise of £21,127 and a peak value of £221,432 in November – 40% lower than the London equivalent.
In most regions, property prices reached their peak in November with the UK average coming to £295,608, following a steady rise after the summer months. This may well be the last significant increase we see for a while, however, with experts predicting a slowdown of this recent growth period in 2023. In December, property values did indeed fall again slightly, but this does not warrant cause for panic!
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What Will 2023 Bring?
In their latest forecast, property experts Savills predict that property prices could fall by up to 10% across the UK in 2023. This comes – rather unsurprisingly – on the back of almost a year of political uncertainty, nationwide strikes, and a cost of living crisis currently showing no signs of resolution.
If the trends of the latest house price index are anything to go by, we may well have already witnessed the peak and subsequently, the beginning of a gradual decrease in property values that could continue well into 2023.
This should not be a cause for major concern, however. What’s more important from an investment perspective is that this value decrease is expected to be brief, with property prices predicted to grow again by an average of 6.2% in the next five years.
With this in mind, current property market predictions for 2023 could signify an excellent investment opportunity for those with the financial means. But where should investors put their money?
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Promising Investment Areas
As the London property market and its growing catchment area become increasingly unaffordable, investors should direct their attention further North.
The most recent House Price Index shows that these regions achieved above-average growth over the past year, with the average property price at least half of the London equivalent. What’s more, is that the North West in particular is expected to come out of the impending slump in a dominant position.
Again, according to Savills, the North West will experience a property value growth of at least 11.7% between now and 2027, with the value of London property set to decrease by 1.7% in the same period.
Key drivers behind this impressive forecast are the thriving cities of Liverpool and Manchester, both of which have now established themselves among the most lucrative buy-to-let investment areas in the UK.
In terms then of investing in UK property, the latest house price index highlights a number of potentially promising areas of investment for the year ahead, with the North West appearing as the leading region.
Additionally, with a forecasted drop in property values across the country, 2023 could well present a unique window of opportunity for investors.
Get in touch today to learn about our investment opportunities in the North West, with attractive rental yields and strong capital growth potential.
