The North-East has been tipped as a potential property hotspot by SG Hambros.
A study by the wealth management group predicts while the North-East of England currently has the lowest house prices across the UK, this is not a trend that will continue and by 2015, property prices will have been steadily climbing at faster than the national average rise.
This, coupled with the number of owner-occupiers growing quicker than anywhere else in the country, has lead to region being dubbed potential ‘property hotspot’ for the future. ?
And in the East Midlands there will be a rapidly expanding owner-occupier population, meaning the area will continue to experience strong house price growth once the currently readily available housing stock becomes fully occupied, according to SG Hambros’ report.
The report also predicts that wealth will be spread more evenly across the UK by 2015, with areas such as the East Midlands and the North-West playing a major role in creating and fostering tomorrow’s wealth.
Whilst the South-East will remain the UK’s wealthiest region over the coming decade, the study reveals that the gap, especially relating to enterprise-based wealth, is narrowing rapidly.
The qualitative and quantitative study conducted by Datamonitor for SG Hambros looked at two means of measuring wealth creation in the future – the total overall wealth, and the growth of overall wealth by 2015, and examined income, enterprise and property as the three main drivers of how wealth will be created and sustained.
Across all indicators, the South-East looks set to continue its wealth dominance, yet the East Midlands is predicted to enjoy significant growth in wealth from enterprise, and the number of start-up businesses established in this area will grow quicker than anywhere else in the country, especially those within the high income bracket.
The West Midlands will also be an area to watch, according to SG Hambros. With Birmingham now home to the largest concentration of business and professional services firms outside London and the South East, these existing businesses are likely to expand rapidly, leading to greater wealth. ?
Prospects in the South-East are also bright, with the self-employed set to enjoy better business survival rates than any other region of the country, which will in turn provide a prosperous environment for healthy profit margins.
Moving North, SG Hambros’ report highlights the importance of Leeds as the financial backbone of Yorkshire, and the city is tipped to be a key driver in wealth creation for those who live there.
Phil McIlwraith, deputy managing director of SG Hambros, says: “The predicted growth of wealth outside of London and the South-East is indicative of a changing pattern concerning enterprise.
“Rising costs have led to a number of firms establishing their bases away from the capital and, going forward, they will clearly be able to take greater advantage of the lower operational costs, better quality of life and improved transport links that living and running a business outside London affords them.”
Looking across the scale at the predicted levels of income throughout the regions, SG Hambros’ data shows that Northern Ireland is set for an upturn in income-based wealth, and is second only to the South-East in terms of the future growth of high income.
This will largely be attributable to the rapid expansion of the construction industry, which will spark growth in the real estate, renting and business activity centre. ?
The report also clearly shows the North-West as a region that will flourish in terms of earnings potential by 2015. Fuelled by the rapid growth of cities such as Liverpool and Manchester, the North-West will be the third highest income-generating area in the UK. ?
While the South-East will retain its position at the top of the income table, the Eastern region of the UK is also on course to experience some substantial levels of income-based wealth.
However, the general lack of high income industries in the area suggests that this will largely be due to its proximity to London, and SG Hambros predicts that more and more high earners will relocate to the East of England, where improved transport links and a generally lower cost of living will enable them to enjoy higher levels of disposable income. ?
McIlwraith adds: “It’s fascinating to see the impact that changing trends concerning income, enterprise and property ownership will have on different regions throughout the UK, and specifically where the future ‘hotspots’ for wealth creation and subsequent growth are likely to be.
“Our report clearly reveals that, while the South-East will retain much of its wealth superiority, there will be some interesting areas to keep an eye on going forward, and the North/South divide so frequently alluded to will not be as clear-cut by 2015.
“We are delighted to be at the forefront of identifying and analysing where such wealth will be created and spread going forward.” ?