House prices across the UK’s major cities are set to rise by 10% this year, a new report has revealed.
According to Hometrack’s UK Cities House Price index, annual house price growth is at 9.4% per annum and looks set to reach 10% by the end of 2015. The average price of a property currently stands at £229,300.
Glasgow, Manchester and Liverpool are currently seeing the highest rates of annual house price growth since 2007.
House prices in Glasgow in the last 12 months are up by 8.3%, the highest rate of growth since August 2007, to an average of £110,000.
Hometrack said that in the last 12 months house prices across Manchester have grown by 7.0% to reach an average of £141,200.
Liverpool registered the weakest house price performance of all the British cities. House prices declined between 2007 and early 2013 and have since increased by 10.5%. In the past year the rate of growth has risen to 5.1%, but despite this modest recovery, the average price of £109,800 is still 13% lower than the 2007 peak.
The recovery across the regional cities contrasts strongly with London where price growth has weakened in some areas due to changes in stamp duty and currency, Hometrack said.
In Kensington and Chelsea prices were down -2.6%, while City of Westminster prices were up 1.3%. This comes after a 70% rise in prices across London since 2009.
Overall house price growth for the past 12 months in the capital was 12%.
Richard Donnell, director of research at Hometrack, said: “Improving consumer confidence and low mortgage rates are boosting demand in cities where the recovery in house prices is in its infancy. While southern cities have been in recovery mode for over 6 years with price gains of up to 70%, the large regional cities have seen far more modest price rises over just the last 3 years.
“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. 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.
“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 to pick up.”
