UK house prices in the 20 largest towns and cities are likely to break above the 10-percent annual inflation milestone by year-end, according to residential property market specialist Hometrack.
Data from the Hometrack UK Cities House Price Index for October, released earlier today, revealed that the average house price in the top 20 cities across the UK has risen 9.4 percent on an annual basis to £229,300, and is “on track to reach 10 percent by year-end”. In comparison, the average price across the whole UK is £194,500, up 7.1 percent from last year.
Notably, the large regional cities outside southern England are recording “acceleration in price growth off a low base”, Hometrack said, with Glasgow (8.3 percent), Liverpool (5.1 percent) and Manchester (7.1 percent) reaching their highest respective rates of annual increase since 2007.
“Improving consumer confidence and low mortgage rates are boosting demand in cities where the recovery in house prices is in its infancy,” Hometrack residential research director Richard Donnell said. “Many corporate investors and developers are looking to the major regional cities in search of better value for money in new investments relative to London.”
However, the three cities in question also have an average house price nearly half that of the average across the top 20 UK cities. At £110,500, prices in Glasgow are still 9.7 percent lower than their 2007 peak; Liverpool’s £109,900 is 13.3 percent lower over the same period, while prices in Manchester are down 2.3 percent to £141,200.
In contrast, prices in London have risen 44.4 percent since 2007, although the top spot in this category is claimed by Cambridge, where house prices have soared 44.7 percent to £388,400. Average UK prices have climbed 7.1 percent over the same period, while ‘city-level’ house prices are up 21.1 percent.
On an annual basis, prices have risen 10.7 percent in Cambridge, only below Oxford with 12.8 percent, and London with 12.0 percent.
“Further house price growth is likely to improve market confidence as it pushes down loan to values on mortgaged homes and creates capacity for households to access cheaper credit,” Donnell said.