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Lancashire Surges Despite the UK's Housing Market Facing a £25,000 Average Value Drop by 2024
As 2023 unfolds, the UK housing market presents a mixed picture. While the average home value is set to decline by £25,000 by the end of 2024, certain areas are witnessing a surprising surge in property prices. This comes against a backdrop of escalating mortgage costs, impacting homeowners and tightening the affordability for prospective buyers.
Market Overview and Predictions
The Office for Budget Responsibility (OBR) forecasts a 4.7% decrease in house prices next year, largely due to high mortgage rates. However, not all regions are following this downward trend. Some areas across the UK are experiencing notable increases in property values.
Regional Hotspots Defying the Downturn
Homeowners in Lancashire and the East Midlands, in particular, are seeing significant gains. A detailed analysis by Hamptons International, based on the latest Office for National Statistics (ONS) data, reveals that over 30 local authorities have witnessed more than a 5% hike in house prices. This analysis compares average transaction prices from January to September against the same period in 2022, offering a reliable snapshot of local authority-level market trends.
East Lothian: A Standout Performer
Among the standout regions is East Lothian, bordering Edinburgh, which tops the chart with a remarkable 10.3% increase in home values. This area, known for its appealing coastal lifestyle and convenient commute to the city, has seen an average price rise of £30,330, reaching £323,730. The region's unique microclimate, weather and property market conditions make it an attractive destination.
Fylde and West Lancashire: Northern Growth
Fylde in Lancashire, known for its proximity to several seaside towns, including Blackpool and Lytham St Annes, has recorded a 7.7% increase in house prices, the highest in any English local authority. The area's appeal, particularly among retirees, has been a key factor in this growth. Often free from mortgage pressures, retirees have been less affected by the rate hikes. West Lancashire, nestled between Liverpool and Preston, has also seen a significant 7.3% rise in property values. The North-West of England, in general, appears to be insulated from the broader price declines, with areas like Lancaster, Preston, and Rochdale also experiencing robust growth.
East Midlands: A Region of Resilience
The East Midlands is another region defying the downturn, with a third of the top 30 hotspots located here. Rutland, for instance, has seen a 7.6% increase in house prices. The region's appeal for those seeking small-town country living, with its picturesque villages and more affordable housing compared to the Cotswolds, is a crucial driver of this trend.
West Oxfordshire: Southern Strength
Interestingly, West Oxfordshire in the South of England has also bucked the trend, recording a 6.5% growth in house prices. The region's appeal lies in its rural charm and proximity to both Oxford and London, offering a balance of quality life and connectivity.
Challenges and Future Outlook
However, not all areas have been fortunate. The South of England and Scotland have seen some of the most significant drops in house prices. In Scotland, Aberdeen has experienced a 6.1% decrease, while London boroughs like Kensington and Chelsea have witnessed a staggering 10% year-on-year fall.
This divergence in regional property markets reflects a broader shift in the UK housing cycle. Historically, London led the recovery post-2008 financial crisis, but now, growth is rippling out to other regions. The rising cost of borrowing has particularly impacted London, where higher property prices necessitate larger mortgage loans.
Savills anticipates that more affordable regions, including Wales and Scotland, will see the most significant price increases up to 2027. This shift marks the beginning of a new cycle, with London expected to lead in growth once again as the economy improves around 2028.
While the UK housing market faces challenges, certain regions defy the odds, offering pockets of growth amidst a broader landscape of declining values. With multiple offices throughout the Lancashire region, Farrell Heyworth is perfectly positioned to help you sell your property.
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