Prices in regional cities on track to build
New research has revealed that average house prices in a number of cities across the UK are forecasted to grow by up to 30%.
According to Hometrack’s UK City House Price Index, regional cities would begin to catch up with the prices currently observed in London, with the capital having experienced a surge of around 89% in prices over the last nine months.
Though the increases in some cities have been relatively strong, these have been classed as extensions of the London market, with the most significant uplifts observed in Bristol and Cambridge. Elsewhere, the growth has been much more sluggish.
For example, whilst house prices in Bristol have surged by 70% since 2009, over the same period, Newcastle figures have risen by just 18%.
Despite this slower growth rates in areas outside London, the research suggested that this may begin to pick up the pace in the near future.
Year on year, average prices in Edinburgh grew by 7.7% in January, whilst Manchester prices saw an uplift of 6.7%.
London, on the other hand, has seen an annual slowdown, with the rate of house price growth falling to just 1.6%.
Commenting on the results of the research was Richard Donnell. The insight director at Hometrack stated: “We expect to see average house prices rise by 20% to 30% in cities like Edinburgh, Birmingham and Manchester in the next three to four years.
“The income to buy a home in regional cities is well below the London average so in the near term we expect to see rising house prices stimulating additional buying and market activity in those areas.
“House prices have some way to increase before there is a material constraint on demand.
“This assumes mortgage rates remain low by historic standards and the economy to continues to grow.”