Towns like Cambridge and Aberdeen show price trends mirroring the capital, not surrounding region
New research by Savills estate agents has shown that the Cambridge residential property market and that of several other cities around the UK are performing in a way more characteristic of the capital, rather than the trends apparent in their surrounding region.
With the cost of living in London increasingly difficult to bear, many people are choosing to commute from towns like Cambridge. This commuter influx, along with increased investment from multinational companies and a strong demand for student accommodation has contributed to large increases in house prices around the city, some 35% since 2010.
Such rapid price increases are much more typical of the capital, yet the research from Savills shows Oxford, Bath and Aberdeen are exhibiting similar trends to that of Cambridge. Overall, the demand has led to a significant variance in residential property prices across the UK, with regional averages often obscuring the severity of difference between neighboring cities within the same region.
An element of the surge in house prices in these cities can be explained by residential property investors being priced out of the London market and looking for other promising real estate markets.
With house prices in these particular cities increasing apace and the outlook for 2015 indicating that the rate of increases are unlikely to abate significantly, it is probable that the number of those unable to buy in these areas and needing to rent will also increase.
This bodes well for buy-to-let investors as further research by Savills showed that the level of profit made by landlords through rental income in the last 5 years is now estimated to be in the region of £177 billion. The figure, excludes rental income and is based on capital growth alone and represents a healthy market for potential retail investors in the buy-to-let sector.
Commenting on the difficulty facing those who wish to move from renting into owning their own property, Lucian Cook, director of residential research at Savills said,
“In a housing market that is expensive, relative to people’s income, it is difficult to see how this will change, particularly given increased mortgage regulation.”
Source: invezz.com