Is Scotland the Next Investment Hotspot?
New figures released by Hometrack, the leading provider of residential property market insights, analytics, valuations and data services, show that the annual rate of UK city house price growth currently stands at 4.9%, down from 6% a year ago. This figure is based on data collected from 20 cities included in its 20 City Index.
Edinburgh has overtaken Manchester as the fastest growing city in the index, with annual house values rising by 6.7% compared to 3.8% last year. Manchester growth stands at 6.5% (down from 6.6% last year) and Birmingham is third on the list at 5.9% (also down from 6.6% last year). The new figures will make interesting reading for potential investors looking for the next big property hotspot.
While most cities are registering lower house price growth than last year, six cities are reporting higher annual growth rates, most notably in Scotland. Residential transactions data from HMRC shows a 20% increase in the monthly run rate of sales over the last quarter in Scotland. Glasgow has also recorded a marked increase in the rate of house price inflation from 1.8% a year ago to 5.3% today. So maybe it’s time to look to Scotland for your next property investment?
The London market remains volatile with the annual rate of inflation in London stable at 2.3%, well down on the 8% annual average growth rate since 2010. Average values continue to decrease across 85% of the markets covered by the London City Index. Hometrack reports that this is due to house prices realigning based on what buyers are willing to spend, as well as concerns over Brexit, employment and possible future interest rate rises.
It is yet to be seen what the impact of the recent interest rate rise will mean, particularly to investors who account for around 20% of all house sales per year. Faced with potential increased borrowing costs over the coming months, investors would be wise to seek property with higher yields or look to pay less for property in the first place.
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Picture credit: Arthur Kraft arturkraft.com