Property Price Growth in Major UK Cities

Property prices in major UK cities have recorded their strongest quarterly growth for three years.

The latest Hometrack property price index has shown that despite the recent snap general election, property prices have increased by an average of 3.5 per cent over the previous 3 month period.

According to the index, which covers property price growth in the 20 largest UK cities, this represents the strongest quarterly growth since June 2014.

The price growth was led by regional UK cities in the Midlands and North, rather than the traditional South East.

Birmingham and Nottingham recorded the strongest growth, both recording rises of 3.8 per cent over the quarter. They were followed by Newcastle and Manchester, where prices rose by 3.5 per cent and 3.3 per cent respectively.

The only areas to record a fall in property prices over the period were Aberdeen where prices fell by 0.9 per cent, and Oxford where prices reduced by 0.6 per cent.

Property prices in London rose more slowly than some of the regional UK cities, recording price growth of 1.9 per cent over the quarter.

Property price inflation in the capital has now fallen to an annual rate of 3.3 per cent, the lowest for five years. However, Hometrack feels that lower turnover and a restricted supply of property in London will prop up the market.

Hometrack says that year-on-year price falls are not expected in London for 2017, instead plateauing at between 2-3%.

Research and insight director at Hometrack, Richard Donnell, commented: ‘There is clear potential for additional house price growth in cities outside South Eastern England. House prices in London have grown 90% since 2009 but growth in 10 cities has been below 30% over the same period.

‘So long as the economy continues to grow, and mortgage rates remain low, we expect house prices to keep rising at a steady rate and close the gap to London.’

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