Over a year into the pandemic, not even the bravest investor could have predicted the housing market would be stirring at such a rapid rate. Retail investors, funds and first-time buyers are becoming aware of the opportunity to take advantage of some of the lowest interest rates in decades.
Although London, the UK’s property powerhouse, has seen minor growth, prices are skyrocketing in areas like the North West and West Midlands. There is significant value to be found in areas like Wigan – which boasts a 30-minute commute to both Manchester and Liverpool – with convenient access to trains and motorways.
From Wigan Northwestern Station, it’s a mere two-hour train ride to London. The proposed Northern Powerhouse Rail (NPR) – a rail program designed to significantly enhance the economic potential of Northern England – will only add to the appeal of commuter towns serving the Norths’ biggest cities.
The prices in Wigan have been stagnant for the last 14 years; however, with an average sale volume increase of 11% in the last year, investors can no longer ignore this once overlooked gem.
The Coronavirus has had a disparate effect on various spheres of society. However, those fortunate enough to have been employed throughout, have cash to spend. With restaurants, pubs and holidays unavailable, many have large sums accumulating in their bank accounts. According to the Financial Times, households worldwide have amassed the equivalent of 6% of global output since the pandemic began. This number is even higher in the UK at 12%. Interestingly, 26% of the households who have reported significant savings during the pandemic are using this as an opportunity to pay off debt, including their mortgages. What is fascinating about this is that these debts are being paid off during one of the lowest interest rate periods in history – perhaps not the best way to utilise these excess funds.
With social distancing restrictions lifting and the possibility of more and more people going back into the office, commuter towns have become an appealing compromise between open aired spaces, gardens and being able to commute to city centres. People are moving away from urban areas to enjoy more space, privacy and a higher quality of life but are reluctant to move too far from work. Therefore, towns like Wigan are an obvious consideration for people living and working in Manchester and Liverpool.
Wigan has a reputation as one of the most affordable places in the UK to buy a home, but its latest title as a property hotspot has resulted in listings in the region having an enviable average of 26 days from going on the market to agreed sale. This is 4 days better than its nearest competitor, Salford, and 18 days quicker than the average for the rest of the UK. With the average sale price of £151,672 (up from £136,493 last year) there is still a huge amount of value to be extracted from the old mining town relative to the rest of the country.
Graph showing days on the market from listing to sale
At KeyStone, we have put a major emphasis on places like Wigan, which meets all our key criteria including house price, rental income and demand for social housing. For our socially minded investors, the ability to make a significant impact on families and transform their lives for the better is equally as important as the exciting returns (6% minimum) they are able to receive. With the impact of the pandemic still to be fully played out, now is as good a time as any to get involved, both to take advantage of the property market and to make an impact on a significant social issue.
UK Land registry data