The once very prevalent North-South house price divide experienced in the UK in recent years is set to narrow significantly over the next five years to 2023. At its largest recorded in quarter 1 of 2016, on average a house in the North of England was worth £163,000 less than the comparable size in the South of England. However, this comparison projected to narrow is a particularly positive action for UK property investors.

Property prices in Northern England are set to rise by 21.6{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} in the North West region, which includes Manchester, Liverpool and surrounding areas. However, rest assured that this rise will not spell disaster for Northern residents, as the average income in this area is also expected to rise in line with property values.

Across the whole of Britain, house prices for the five years between 2019 and 2023 will increase by 14.8{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}. Taking the average house price in Britain of £226,906 (Gov.uk April 2018), this will add £33,582 to the value projected, should an owner sell in 2023.

The table below provides the predicted value increase of property by the end of 2023 in five regions in the Midlands and North of England.

Table 1:

UK RegionAverage House PricePercentage IncreasePredicted 2023 ValueValue Increase
North West£162,59621.6{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}£197,717£35,978
North East£125,08517.6{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}£147,100£22,015
Yorkshire and Humberside£160,26320.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}£193,117£32,854
East Midlands£186,41419.3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}£222,392£35,978
West Midlands£190,60719.3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}£227,394£36,787


This projected growth in capital appreciation provides a fantastic opportunity for buy-to-let investors as the predicted data demonstrates the benefit of the increase in value by purchasing property off-plan today, should a wish to sell arise upon the property’s completion or at a later date in 2023 and beyond.

The advantages to investors do not end there as rental income figures are also set to increase over the next 5 years with an average of a 13.7{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} rise. The current average 2 bedroom property to rent in the M1 Postcode of central Manchester is £1,188 per calendar month (pcm), meaning an average increase of £1,953 rent annually (the equivalent of 13.6 months’ rent today).

Meanwhile, the average monthly rent in London is £1,884 per month on a property valued today at over 3 times as high at £732,128, compared to central Manchester at £204,420. The capital in contrast is only expecting a 0.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} rise of rents to £113 annually, demonstrating the attractive contrast to the rental rise of Manchester. Converting these figures into percentage yield returns, this places Manchester producing an average 6.9{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} yield return compared to London with only a 3.0{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} yield.

The number of Londoners moving to major cities in Northern England has more than tripled since 2010, with today 1 in 5 of those leaving London moving to the North, increasing hugely since 10 years ago when it was 1 in 17, again demonstrating the attractiveness of recent investments in the North.

Table 2 below breaks down the expected percentage increases of UK regions expressed in table 1 further by each year, with comparisons to be drawn to London.

Table 2:

UK Region201920202021202220235 Year Total
North West3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}6{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}4{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}4{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}21.6{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}
North East2{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}17.6{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}
Yorkshire2.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}5.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}4{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}4{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}20.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}
East Midlands3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}19.3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}
West Midlands3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}19.3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}
South East0{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}9.3{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}
London-2{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}0{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}1.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}2.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}4.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8}

Source: Savills

Noticeably London is only increasing by 4.5{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} with the South East of the UK also projected to have considerably lower increases than the North. London is the only region to have a minus figure projected for 2019.

A key driver behind this strong economic forecast is that large businesses and organisations are in the process of north-shoring. By choosing to move their operations away from London to cities such as Manchester, they are increasing skilled job opportunities and accelerating the demand for property even further than before. The planned HS2 rail line linking London with Birmingham and onto Manchester and further north will only accelerate this growth of north-shoring in the near-future.

As part of this north-shoring process, Amazon have just announced their new office coming to Manchester’s Northern Quarter whilst Google, Microsoft, RBS, Kellogg’s have also opened offices in the city centre. Birmingham on the other hand has also received new commercial residents with HSBC moving their retail side of the business to a HQ in the city bringing 2,000 jobs with 88{32a70e766e49c95f504e78d863f700cc0bc860776959e311316a05ffc4828dc8} filled 3 months before the move, all requiring property.

With property prices rising faster than any other city in the country in Manchester and fantastic yields being achieved, the city continues to be the UK’s top investment hotspot.