An area of Birmingham named the poorest place in the UK as recently as last year now has the fastest-rising property prices in the country, according to a report.
Prices in the B16 postcode of the city, which covers the Ladywood area, rose by 17% in the 12 months to July, far outstripping any part of London, where the property market has cooled rapidly since the EU referendum.
The average house price in Ladywood jumped to £172,498, from £147,121 the year before, according to a report by the mortgage arm of Barclays bank, with local estate agents pointing to an influx of young professionals and investors amid the HS2 rail project and the building of a “super hospital” in nearby Smethwick.
Ladywood, on the western edge of the city centre, has long suffered from a reputation as a crime-ridden jumble of estates, high unemployment and low pay. Last year it was named by the End Child Poverty campaign group as having theworst levels of child poverty in the UK.
But cheap housing – it is possible to buy a three-bed terraced house in the area for £120,000 – has prompted a new wave of buyers to move in.
At Connells estate agents in Ladywood, agent Alex Jones said: “A lot of people are investing here. It seems people are starting to see Ladywood in a different way. We have HS2 coming, and there’s the big new hospital in Smethwick.
“It’s often been named as one of the poorest places in the country, but it’s completely different now. Lots of young professionals like it because it’s so close to the city centre. A lot of new flats are going up and a lot of Londoners are buying.”
In August it was revealed that for the first time in half a decade, more people are leaving London than are moving to it. Net migration away from the capital has exceeded 80,000 people a year, with a lack of affordable, spacious and good-quality housing a major factor in the exodus.
The Barclays report, based on data from property analysis firm Hometrack, reveals that most of Britain’s property hotspots are previously ignored areas where prices were low, often industrial wastelands that are going through regeneration.
The third-fastest rising market in the UK is Finnieston in Glasgow, where prices have jumped by 14% over the past year. Once part of the city’s docklands, it is now known for bars and restaurants.
In Openshaw, east of Manchester’s city centre, prices are up 13%. One of the cheapest places to buy property in Britain, Barkerend in Bradford, is also among the top 10 for price rises.
Only one upmarket location stands out in the list – the EH2 postcode encompassing Holyrood in Edinburgh, where average prices have risen from £326,000 to £373,000 in the past year.
After years sitting at the top of the table for house price growth, prices and transaction activity in London have largely flatlined since the EU referendum.
“Following a decade of significant property price growth in London, the average increase was down to just 2% in the last year. The trendy area of Clapton saw the largest increase in property prices, but at only 5%, this was still significantly below the figures that home owners have come to expect in the city,” said a spokesman for Barclays Mortgages.
But the figures will reignite the debate over gentrification, with outsiders moving to low-cost areas accused of inflating prices and destroying existing communities.
Separate figures from Hometrack, part of property website Zoopla, reveal that the average property in the London is a record 14.5 times local earnings, compared to just 5.9 in Manchester, Birmingham and Leeds.
“Despite the recent increase in the base rate of interest, house prices in regional cities are likely to have further upside given their current affordability levels,” said Hometrack. “However, London is expected to underperform over the next 2-3 years as house prices adjust to the levels that home buyers are prepared to pay.”
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