Commuter belt property values outperform every major UK city
The latest research from Yopa has revealed that house price growth across the commuter belt is outperforming the city itself across every major UK city analysed, with the gap as wide as 4.6 percentage points.
Yopa analysed the annual rate of house price growth across 12 major UK cities and compared it to the average rate of growth seen across their surrounding local authority commuter areas.
The research shows that in all 12 cities analysed, house prices are currently growing at a stronger rate across the surrounding commuter belt than they are within the city itself.
This trend is most pronounced in London, where house prices have fallen by -3.7% over the last year. In contrast, the surrounding London commuter belt has seen prices increase by an average of 0.9%, a performance gap of 4.6 percentage points.
Cardiff has seen the second largest divide. House prices within the city have increased by 2.9% annually, while its surrounding commuter areas have enjoyed average growth of 6.7% – a difference of 3.8 percentage points.
Nottingham ranks third, where city house prices have fallen by -0.7% over the last year, compared to average growth of 2.4% across its surrounding commuter areas, a difference of 3.1 percentage points.
A similar trend is also evident in Birmingham. House prices within the city are down -0.3% annually, while the surrounding commuter belt has seen average growth of 2.6%, a gap of 2.9 percentage points.
The commuter belt is also outperforming in Glasgow, where surrounding areas have seen average growth of 5.0% versus 2.5% within the city itself, while Manchester has seen growth of 2.7% across its commuter areas compared to just 0.5% within the city.
Sheffield and Newcastle have also seen their surrounding commuter areas outperform by 2.0 and 1.9 percentage points respectively.
However, the gap between city and commuter belt performance is far less pronounced elsewhere.
House prices in Bristol have increased by 2.2% over the last year, compared to 3.2% across surrounding commuter areas, while Liverpool has seen growth of 4.8% within the city versus 5.1% across its commuter belt.
Leeds has seen the smallest difference of all cities analysed, with house prices increasing by 3.7% within the city itself compared to 3.8% across surrounding areas, a difference of just 0.1 percentage points.
Verona Frankish, CEO of Yopa, commented:
“Higher mortgage rates have put far greater pressure on buyer affordability in recent years and, while the borrowing landscape has improved, buyers are still having to think carefully about where and how they spend their money.
For many, stretching their budget to remain within their favourite city may have been achievable when mortgage rates were at historic lows, but today that same decision comes with a considerably higher monthly cost.
As a result, the commuter belt can provide the next best option, allowing buyers to remain within reach of the city they know and love, while potentially securing more home for their money or simply purchasing at a price that better suits their current borrowing power.
Our research certainly suggests that these surrounding markets are holding their own, with house price growth across the commuter belt outperforming the city itself in every major city we analysed.
Of course, this doesn’t mean buyers are turning their backs on city living and in places such as Leeds and Liverpool there is very little between the two markets. But with affordability remaining a key consideration, it’s easy to see why the commuter belt continues to appeal to those who want the best of both worlds.”
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