With the UK property market in a turbulent state due to rising interest rates and economic uncertainty, deciding on the best areas to invest can become tricky. A sharp rise in interest rates has made it harder to borrow money for house purchases, with mortgage applications currently trending downwards. Likewise, the rental market has experienced rising demand and soaring rents. However, amidst all this uncertainty, opportunities can still be found, the East Midlands being a case in point.
The property market in the region has experienced an incredible 77% average property price rise in the 10 years between 2013 and 2023 and Leicester alone saw an increase of 93%. This ranks the East Midlands among the regions with the biggest property price increases in the whole of the UK.
The average house price in the region is currently £247,634 according to the UK House Price Index, which is up by 4.6% from last year. However, these figures vary depending on the data provider and between different locations.
According to Right Move, over the past year, the predominant property type sold in the East Midlands was semi-detached houses, with an average price of £232,018. Detached properties, on the other hand, had an average price of £385,673, while terraced houses commanded an average of £189,674.
The average property in the East Midlands last year was an average of £266,629, positioning it as a more expensive market when compared with neighbouring county Yorkshire and the Humber, where the average price was £236,702.
Nevertheless, it remained more affordable than the West Midlands, with an average price of £282,858, and the East of England, where the average price soared to £410,524. Rutland emerged as the most expensive subregion within the East Midlands, recording an average price of £411,279, while Lincolnshire offered the most economical properties at an average of £235,687, as reported by Right Move.
The Office for National Statistics (ONS) places the East Midlands as the area in the UK that saw the highest rise in house and rent prices in 2022. ONS figures showed a 12.3% yearly rise to an average house price of £256,000 and private rents went up by an average of 5% during the same time.
On the one hand, the region has seen huge economic growth improving prospects for the region’s future prosperity, however, affordability is still a challenge for many. So with increases like these, is it too late for prospective landlords to invest in property in the East Midlands, or is there still room for a possible upside?
The East Midlands and Leicester in particular tops polls as one of the most favoured places to live in the UK due to its economic growth, job opportunities, and good work-life balance. Areas such as Chesterfield and Wolverhampton are often cited as highly desirable areas. In addition, big investors are also getting in on the act and buying up land and property throughout the region. Examples of this include the Cassidy Group’s acquisition of a freehold in Nottingham which will become the site for its third development of purpose-built student accommodation in the city. Other popular areas in the region include Solihull, Warwick, Birmingham, and Stratford upon Avon.
In addition to a flurry of housing and commercial developments being announced, the government has also given the green light to a pilot Landlord scheme in Nottingham. While mortgages might still be slightly affordable for those with deep pockets, sharp increases in the rental market mean that private rents are becoming less affordable for most workers on median wages. Meanwhile, mortgage applications are down as buyers adopt a ‘wait and see’ approach.
As a result, borrowing rates have started to come down as banks try and entice buyers back into the market. Right Move says that it is the seventh week in a row that mortgage rates have dropped with the average 5-year fixed mortgage (85% loan to value) at 5.73%.
In conclusion, although the East Midlands leads the way in house price rises and rental properties, there may still be investment opportunities available. The investment by private companies and the loosening of legislation, coupled with the region being a desirable place to live means the East Midlands is still on an upward trajectory. Investors and landlords, or even those looking for a forever home, could do well to look at the area for opportunities.
BHW Conveyancing is the leading residential property law firm in Leicestershire and is ranked in the top ten real estate firms in the East Midlands by the Legal 500 guide. We pride ourselves on giving our clients a seamless and efficient end-to-end conveyancing service and adhere to high-quality industry standards. We work with many estate agents and financial advisors as their preferred conveyancing partner. Due to our proactive approach to progressing our clients’ property transactions, we are constantly being referred time and time again.
Whether you are a property professional, seller, or buyer, we can help with your residential conveyancing queries. To request a personal conveyancing quotation, or to discuss setting up a professional referral relationship with your business, please call us on +44 (0)116 289 7000 or send us an email at email@example.com.