Property prices in Manchester over the past two decades have risen higher than in any other city in the UK – including London. 

A new study shows that house prices in Manchester jumped an incredible 143% from the start of the millennium to this year. Second highest property price rise was in Leicester, with 132% and third, Southend-on-Sea in Essex with a 117% increase. 

In practical terms it means home buyers who were paying an average £73,910 for a property in the Manchester back at the turn of the Millennium are today having to fork out £179,537 for that same property. In Leicester the jump was from £82,118 to £190,440, and in Southend-on-Sea the average house started out costing £132,239 in 2000 and is now worth around £287,173 on average.

Greater London showed biggest regional increase

The analysis was carried out by Ocean Finance, who based their findings on figures produced by the Office of National Statistics (ONS). In terms of regions, Greater London has the biggest property increase with 95%, followed by the East Midlands and Yorkshire (both on an equal footing with 87%). The North of England and Northern Ireland fared worst in the regional category. 

House prices in London fared fourth highest

Meanwhile, other cities who made the top ten list for increased property values, included (in order): City of London (116%), Bristol (£112%), Kingston upon Hull (102%), Cambridge (101%), Brighton (98%), Derby (96%) and Coventry (95%).

Terraced homes more likely to rise 

Interestingly, terraced homes are more likely to rise highest in value (96%) than even detached bungalows. The latter have the third highest rise with a 70% increase. Semi-detached houses increased in value by 84% and flats or maisonettes, by 69%.

The average cost of a home in England and Wales at the moment is £245,000, and £496,000 in London. Values are expected to remain steady – and even grow – between now and March 2021. 

But it’s believed they will start to fall by the fourth month of 2021 – in line with the end of Chancellor Rishi Sunak’s Stamp Duty Holiday. The latter means savings of up to £15,000 on a property worth £500,000 or less. Increasing unemployment will also see the property market slowdown. 

According to some analysts – judging by the fall in sales for October, according to the Halifax Price Index – analysts believe this may already be happening. Rightmove, meanwhile, recorded a small drop in property values during November. Despite this, more homeowners (27%) believe their property will be worth more in 12-months’ time, than those who don’t. This is especially the case if they own a house rather than a flat. Apartments, it appears, are going out of favour, with houses and gardens far more likely to appeal to new buyers and those downsizing or moving to a larger family home.

We stay in the one house for 23 years

Data, from the government’s Land Registry, also shows that we tend to move after a couple of decades – or rather 23 years. Within that time our property has usually gained around £96,979. Fittingly, that’s around three times the value of the average UK salary.

Residential property sales may be booming right now, but it’s a different story, of course, for commercial property companies. 

The pandemic has had a devastating effect on the profits of many property groups due to lockdowns and the government’s insistence individuals should work from home as much as possible. Then there has been the understandable reluctance of shoppers to venture down the high street for health reasons. At the same time, restaurants have had their opening hours restricted, and pubs banned from selling booze. 

It shouldn’t really come as any surprise then to learn that many tenants are downsizing their property projections and commercial property companies are responding by cutting their portfolio valuations – particularly since construction work has also been delayed, in many cases.

Admittedly, it can’t all be blamed on the pandemic though. When it comes to retail shopping was already heading online. Working from home too was already an option for many company employees. What the pandemic has done in these two cases is simply accelerate already inevitable moves. 

Pandemic forces portfolio valuations and shares down 

Meanwhile, two commercial property companies in particular have revealed how the Covid-19 pandemic has affected them. London’s Great Portland Estates and flexible office unit provider Workspace have both announced a reduction in their share price, as well as downgraded property portfolio valuations.

Great Portland Estates, for instance, only collected 80% of rent due last month – mostly from offices, rather than restaurants and retail outlets. The Group has also been forced to drop rents as a result of vacancies and lockdown. As a result, it has down-valued its commercial property portfolio by at least 6%. Last week it saw its shares fall by 2%.

Land Securities (LandSec), which owns the retail centre Trinity Leeds experienced a huge £945m loss over the past six months. It brings its portfolio valuation down to a loss of £835m.

The FTSE 100 group also has a central London portfolio, valued at around £7.9bn, which makes up around 67 per cent of its assets.

It’s CE Mark Allan, said he believed there would always be a market for high-quality London office assets, making him ‘optimistic’ for the future. 

But not all commercial property ventures agree…

Workspace revealed the value of its property portfolio had fallen by 5% over the past six months. For the first three months of the pandemic they offered hard-hit customers a 50% reduction in rent. Their shares fell by 1.3% last week, resulting in a total annual fall of 38%. A statement by the Group, admitted that the pandemic had “fundamentally changed the role and requirements of the office”. 

Entrepreneur and Dragon’s Den panel member Theo Paphitis has already said he will be cutting his office space requirements. He added: “I can’t see offices with that many people ever again. First thing I’ll be doing is cutting down the number of people come into the office. We’ll need less space.”

Inner city offices and business areas worst hit

One of the locations most hit by the changing demands for office accommodation is the Isle of Dogs. Skyscrapers in particular, have fallen in popularity, due to the inability to adhere to distancing guidelines in lifts and central areas. Instead, many companies are now seeking self-contained developments. 

Lifestyle changes are affecting the housing market more than Rishi Sunak’s furlough extension, according to a leading property analyst.

Richard Donnell, Zoopla’s research and insight director, said it was city dwellers selling their £1 million homes that was continuing to prop up the market. Being in lockdown for 50 days, he said, had encouraged them to move to a country or seaside retreat worth half the value of their former luxury pad.

As a result, he said, house prices would continue to grow – even until March when the current furlough scheme and Stamp Duty holiday are due to end. The property portal’s data shows 40% more traffic to their website than the previous year.

Donnell added: “The rate of growth at the end of next year will be less than 4 or 5%, but it will take quite a lot, and quite a dramatic change of circumstances, for house prices to go into negative territory at the end of next year.”

HM Revenue and Customs (HMRC) also noted high sales numbers, with 98,010 property sales going through in September. That number is an increase of 21% on August’s figures, although it is slightly down year-on-year at 0.7%.

London suburbs see biggest price jump for five years

But it’s not only coastal and rural areas that are benefitting. Even the outer suburbs of the capital are cashing in on the dash to get out Inner London. Upmarket estate agency Knight Frank say that at 0.9% they have seen the highest quarterly rise in prime property there for five years. 

Home owners in Belsize Park were the biggest winners, with property rising 3.2% there. Next highest was Dulwich with a 2.3% increase in prices, Wandsworth had 2.1% and Wimbledon 1.8%.

London property letting market not as buoyant

Valuations may be higher for home owners, but landlords are seeing a drop in rental values in the prime outer London market, according to Knight Frank. High levels of supply had meant that rents fell 7.6%. In Inner London the drop was even steeper, at 9.1% for the year to October.

The reason there are so many more rental apartments available – 20% more than usual at this time of year – is because of uncertainty surrounding coronavirus.

Average UK house price worth £250,000 say Halifax

Meanwhile, another record was set this month. This time it was the turn of the Halifax House Price Index which recorded the average house price at worth more than £250,000 for the first time in its 37 years.

Lockdown 2 hasn’t had much effect on the property market – physical viewings are still going ahead (albeit in a socially distanced fashion). This compares to the first lockdown when such viewings were banned for a period of seven weeks. 

Just one week after Lockdown 2 began, the number of house valuations had gone up by 38%. This second lockdown is due to end on December 2 – but not, it seems, the continued desire for people to move home.