House price growth being held up by Northern Powerhouse

 

House prices in cities across the UK have risen by an average of 5.5% over the past 12 months, with the northern regions supporting much of the growth while parts of London and the south continue to struggle.

The Northern Powerhouse has come out on top in the latest UK cities house price index from Hometrack, with better affordability leading to high levels of demand in cities away from the capital led by Nottingham, Manchester, Birmingham and Leeds in England.

Edinburgh saw the strongest growth in house prices in the year to March for the UK, with a huge 8.1% rise bringing prices to £229,200, compared to a 4.1% uplift the previous year. However, topping the list in England was Nottingham, which was not far behind with property price inflation of 8%, and current house values of a modest £148,500.

Ones to watch

Manchester was the next top performer with well above average growth of 7.4%, while house prices remain below the national average at £162,100. This was followed by Birmingham and Leeds which both enjoyed a 7% house price increase, bringing average property prices to £157,200 and £162,600 respectively.

At the other end of the scale, Aberdeen house prices continued to fall over the past 12 months, with an overall 6.8% decline as values reached £162,000, while Cambridge saw a tiny 0.6% increase. London’s house prices improved slightly compared to the previous 12-month period, according to Hometrack, but still only grew by 3% which is below the national average of 5.5%.

Sustained uplift in house prices

Richard Donnell, insight director at Hometrack, said: “The headline rate of city house price growth continues to be driven by above average increases in regional cities where attractive affordability and a lack of housing for sale is supporting house price inflation.

“This latest report identifies other cities such as Cardiff, Leeds, Newcastle and Sheffield as having recorded a sustained uplift in the rate of growth over the last 12 months.”

Despite the cooling off seen in London housing market over the past couple of years, Donnell believes the situation is improving slightly in the capital, although 36% of postcodes there are still seeing falling values, particularly towards the centre of the city.

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House price growth being held up by Northern Powerhouse

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