The housing market in the north of England could begin to pick up reasonably soon, according to Knight Frank’s latest analysis. As prices have already fallen by as much as 25% in some areas against a predicted fall of 30%, experts forsee a turnaround after the market has bottomed out in the north overall.
This particularly applies to the new build sector, where prices have fallen fastest, says the report, and purchasers are expected to return over the next few months leading to increased sales volumes next year.
Jon Neale, head of development research at Knight Frank, said: ‘As the slowdown hit many northern markets first – as much as a year before prices began falling in London – developers had put their activities on hold well before the effects of the credit crunch really became apparent.’
‘As a result, land values have already begun to approach their lowest level in parts of the north, and this could attract interest from developers. Also, the almost-complete halt in new housing development suggests that, in certain locations, undersupply of good-quality units could soon be an issue.’
The report also points out that lack of supply is also fast becoming an issue in the north, as the gap continues to increase – by 2021 there will be 1.1m more households in the area, it claims which are bound to drive prices up. However, for the moment activity is expected to pick up as well: ‘This rapid fall in prices has a silver lining, said Julian D’Arcy, head of residential development for Knight Frank in the north of England. ‘There is still a demand for housing, especially for quality homes in good locations and for a more diverse mix of housing, particularly family houses.
‘It is important to remember that this more realistically-priced housing market provides the clarity that buyers need to be able to commit with confidence. This is a time when it pays to be brave, especially since this current decline cannot, and will not, last forever.’