20th November 2015
Property prices rises have spread out of London and the South East as experts expect prices in Britain’s 20 biggest cities to rise 10% this year.
According to Hometrack, Glasgow, Manchester and Liverpool are reporting their highest rates of house price growth since 2007, whereas in London prices are dampening after huge rises.
The average price in Britain’s 20 biggest cities are up 9.4% on last year at £229,300 and growth is expected to hit 10% by the end of the year. The country’s cities have outperformed the wider market as UK house prices rose 6.1% on average in September – adding £13,000 to house prices and pushing them to a record high of £286,000.
Richard Donnell, director of research at Hometrack, said lower mortgage rates and increasing confidence was pushing up demand in the north of the country.
‘While southern cities have been in recovery mode for over six years with price gains of up to 70%, the large regional cities have seen far more modest price rises over just the last three years,’ he said.
In Glasgow, prices rose 8.3% in the past year, meaning the average house now costs £110,000. In Manchester house prices have been recovering since 2012, up 17% since then and 7% in the past year to an average value of £141,200.
Liverpool had been the weakest performing city when it comes to house prices, with prices falling until early 2013. However, over the past year it has seen prices up 5.1% and the average house now costs £109,800 – although that is still 13% lower than the 2007 peak.
Although London saw huge house price rises recently, prices in some areas are falling, which has been largely blamed on stamp duty reform.
In Kensington and Chelsea prices were down 2.6% and homes in the City of Westminster increased in value by just 1.3%.
The price of property in the capital has still risen by 12% in the past 12 months and the average property now costs £448,200.
‘The outlook for the next 12 to 18 months will be a balance between how much the high growth cities slow on affordability pressures and how much more momentum will come from cities where the pick-up in house prices is just beginning,’ said Donnell.