The English city defying the house price slump

Many estate agents were happy to see the back of 2023 as sales slumped after a raft of interest rate rises and stubbornly high inflation. 

Yet one area defying the gloomy market towards the end of the year was Bristol, where one two-bedroom Victorian property in the BS10 postcode had a flurry of viewings and four offers at the guide price of £345,000.

“There are a lot of first-time buyers in Bristol with steady jobs in the public sector who have now accepted that rates are unlikely to fall drastically for a long time,” says Robert Nagle, of the local estate agent Leese & Nagle, on the level of interest. “After holding back during the uncertainty, they now don’t want to wait.”

Although much slower than last year, Bristol’s market is bucking the UK downturn. For the 12th month, it is the “hottest” market – as defined by the ratio of for sale properties under offer – at 61pc in December, according to the analyst PropCast – significantly above the UK average of 40pc. 

The city and county (Bristol is classified as both) includes four of the 10 hottest postcode districts too: BS3, BS5, BS6 and BS7.

Recently named Time Out’s Top Places to Visit in the UK in 2024, Bristol has a vibrant arts, music and nightlife scene that helps give it one of the highest graduate retention rates in the country. But what else is fuelling the property market?

The number of Londoners moving to Bristol has dropped to around 4.8pc of buyers, according to the estate agent Hamptons. Underlying demand for homes is strong employment opportunities across education, research, engineering and financial services, a thriving start-up scene and the highest international migration for two decades – especially from non-EU countries.

George Cardale, head of new homes at Savills, says there’s strong interest from China and Hong Kong. 

“Overall, 2023 has been a challenging year, but we are still seeing demand from three key groups: first-time buyers, downsizers and upsizers. Chains are very much back again.”

The agent’s research department projects capital growth of 19pc over the next five years, and for rental rates to increase by 20pc across southwest England. So where to buy?

For first-time buyers

Are first-time buyers likely to see prices falls? 

David Fell, lead analyst at Hamptons, says that the average property price dropped by 1pc in Bristol to £385,950 over 2023: “In cash terms the average home cost £3,420 less this year than it did in 2022, but still a long way from wiping out the £34,260 increase between 2021 and 2022.”

The “hot” BS3 postcode includes Bedminster and Southville, two areas popular with first-time buyers. 

Arty Bedminster, a once industrial suburb in the south of the city, draws both young professionals and families. The average price of a terraced house sold in the last year was £432,606, according to Zoopla. 

New one-bed flats at the Factory No.1 development cost from £250,000.

A big regeneration project – Bedminster Green – is being built on former factory sites around East Street, the area’s historic but ailing high street, and St Catherine’s Place shopping centre has 2,273 new homes in planning.

Geoff Robjent, who works in public relations, chose Bishopston in BS7 when he moved from Peckham in southeast London two years ago. 

A two-bed split level duplex purchased for around £300,000 is shared with his and his partner Bea Hunt, a nurse.

Geoff says: “I love all the independent shops of Gloucester Road, exploring trendy ‘Bedmo’ [Bedminster] which is a bit like East London’s Shoreditch, and the fact the train is only 1hr 15 to London – I commute there once a week.”

Easton, named (also by Time Out) as the city’s “coolest” neighbourhood, in BS5 is another magnet for young, remote workers looking for co-working opportunities and more affordability. The average price of a semi-detached house is £261,167 (Zoopla).

For upsizers and families

Higher mortgage rates have hit those stretching themselves the most. Buyers looking to upsize to a larger house who have seen what they can afford to pay fall furthest. 

The average house in Bristol cost £429,980 in 2023, down from £440,140 in 2022, according to Hamptons/Land Registry.

Yet second-steppers may have gained from the fact that the average Bristol flat has risen by 2pc during 2023 – to £290,660.

BS6’s Cotham, Redland and Montpellier are popular for their proximity to central Bristol, trendy Clifton Village and the green lung of Clifton Down, Gloucester Road eateries and good schools – Cotham School is a well-respected secondary that attracts children from Clifton who don’t go private.

Emilie Heinonen, who founded the interior design agency People and Spaces, chose Kingsdown, south of Cotham, for its family-friendly vibe – her family walk or cycle everywhere and she also likes the book club, where she says the average age is “around 83”. 

“After living in London, Helsinki and Sydney we thought Bristol was the perfect place – a more ‘manageable’ version of London,” says Emilie, 43, whose husband is from Exeter. 

“In my business I love the Georgian architecture of this little pocket.”

A little further out of the centre, Henleaze and Westbury-on-Trym remain popular with families for their villagey feel and sense of community, says Robert Nagle. “You can find a three-bedroom semi for around £600,000, a four-bed for £700,000 upwards.” 

The agent is selling one for £845,000 in the catchment area for Henleaze Junior School (Ofsted rated Outstanding). 

Along with nearby Westbury Park, Bishopston and St Andrews, Henleaze is also attractive for family house rentals, says Charlotte Strang of property finders Strang & Co. “But the yields are not as good as in an area like Easton, where purchase prices are much lower.”

For property investors

Buy to let (BTL) is not dead, according to Charlotte Strang, who sources properties for investments, student landlords and lets to professionals. 

“For flats, I would recommend investing in a two-bedroom property with some sort of outdoor space like a balcony. These tend to rent better than one-bedroom flats. They’re also a safe investment for selling on. Many tenants like to use the second bedroom as an office.”

She says Bristol harbour’s Finzels Reach, Horizon (Cabot Circus) and Everard’s Printworks are schemes where initial yields of around 5pc can be achieved for the BTL investor. 

In the Harbourside, flats in developments such as such as The General, Anchorage and Hope Quay are particularly sought after. “A two-bed apartment with views of the harbour rents for around £1,700 per month.” 

For student lets, Ashley Down area is popular for its proximity to the University of the West of England and Bristol University. A four-bedroom terraced house costs around £600,000, and can be let to students for around £3,300 per month, giving an initial yield of around 6.6pc. 

Regeneration areas

Investment opportunities include the Temple Quarter area, surrounding Bristol Temple Meads Station – an area of around 130 hectares, considered to be one of the UK’s largest urban regeneration projects. Another one to watch is Bristol Zoo – there are plans for 196 new homes under consultation.

New residential neighbourhoods slightly further outside the city include the Brabazon development in Filton, a large regeneration area on the former airfield which will benefit from a new railway station linking Filton with Temple Meads in under 15 minutes. 

Prices start from £194,000 for a one-bedroom flat, through Savills. 

“Filton is an attractive place for professionals to live, particularly as some of the large employers such as Airbus are based there,” adds Ms Strang. Chinese and Hong Kong buyers especially prize Filton’s easy access via the M4 and M5, and proximity to Bristol airport.

Downsizer demand

The prime neighbourhoods of north Bristol, particularly Clifton, Sneyd Park, Redland Hill and Westbury Park, are often sought-after for their community feel and direct access to the shops and eateries of Clifton Village and Whiteladies Road.

“But a lack of smaller properties in these neighbourhoods means there is still competition for the classic period properties,” says Nigel Bishop of buying agency Recoco Property Search. 

“You can pay £495,000 for a two-bedroom apartment in Clifton Village – Knight Frank is selling one with a balcony – or Savills is selling one in a landmark building for £850,000.”

Many downsizers prefer the hassle-free and energy-efficiency of new-builds, especially around the vibrant Harbourside area. 

New waterside developments such as McArthur’s Yard (flats from £313,000) have been attracting downsizers, BTL investors and first-time buyers, according to George Cardale.