20 July 2017
The West Midlands has been named as a growing ‘housing hot-spot’, according to a new report by accountancy giant PwC.
The firm’s latest UK Economic Outlook says the West Midlands is among the UK regions with the fastest growing house prices.
PwC adds that the locality is tipped to be one of the fastest growing for house prices in the UK. The West Midlands is projected to see house price growth of 4.5 per cent in 2017, above the UK average of 3.7 per cent.
This is only behind the East of England which will see a growth of 5.3 per cent, the East Midlands and South West both at 4.7 per cent.
However, this is against a backdrop where the West Midlands is expected to lag behind others in terms of economic growth this year, expanding by around 1.2 per cent.
PwC added that growth was expected to slow in most regions during 2018, as the UK continued to feel the effects of Brexit-related uncertainty
The new report says that the London property market, which has been most severely impacted by economic and policy uncertainty and the recent changes to stamp duty, will continue to slow, with only 2.8 per cent and 3.8 per cent growth on average in 2017 and 2018 respectively.
The average residential property in the West Midlands could be worth approximately £183,000 in 2017, £8,000 higher than in 2016, and could rise to over £208,000 by 2025.
Matthew Hammond (pictured), PwC Midlands regional chairman, said: “The housing market in the Midlands reflects the strength of the West Midlands economy as a key region in the UK.
“This latest outlook supports the findings of our Good Growth for Cities Index IN 2015 & 16 which show that key cities in the region, including Birmingham, Coventry, Stoke-on-Trent and Wolverhampton, are performing well in terms of jobs, health, the number of business start-ups and transport and environment.
“The West Midlands is becoming the destination of choice for businesses looking to operate outside of London. The region has the necessary ingredients for a strong economy and it’s essential that public, civic, business and education leaders continue working together to further improve the economic, employment and skills prospects in the West Midlands."
Figures released by the Office for National Statistics recently showed that the cost of the average home in the UK increased by 4.7 per cent in the year up to May 2017.
However, this was a reduction in the rise noted the previous year, which was 5.3 per cent.
At the time these figures were released, PwC said that the main driver for the slowdown was Brexit, a theme continued during its latest report.
PwC’s forecast projects GVA growth in the West Midlands will grow by around 1.2 per cent in 2017, slowing to 1.1 per cent in 2018. It represents an increase on PwC’s November 2016 forecast of 1.0 per cent growth in 2017.
UK GDP growth will slow from 1.8 per cent in 2016, to around 1.5 per cent in 2017 and 1.4 per cent in 2018, according to the latest projections from PwC. This is due to slower consumer spending growth and the drag on business investment due to ongoing political and economic uncertainty relating to the outcome of the Brexit negotiations.
While UK economic growth held up better than expected in the six months following the Brexit vote, growth slowed in the first half of 2017 as inflation rose sharply, squeezing household spending power.