House price growth is widening across the UK with house prices rising the fastest in the most affordable areas. Cities and towns in the north-west of England are leading the way.
The Zoopla House Price Index for May reveals UK house prices has grown by 4.7% in the past year. This has led house prices to increase by an average of £10,246 over the past 12 months to £229,300. House price growth in England has even meant some 1.8m properties have moved into a higher stamp duty bracket.
House prices are being supported by strong levels of demand. This is still happening despite a recent moderation approaching the end of the initial stamp duty holiday on 30 June. Demand for homes is 26% higher in the year-to-date when compared to 2020. At the same time, flow of new supply is down 2%.
Gráinne Gilmore, head of research at Zoopla, comments: “The stamp duty holiday boosted demand in the housing market. However, buyer demand remains elevated despite the initial holiday ending – signalling that the once-in-a-generation ‘reassessment of home’ has further to run this year.
“The total stock of homes for sale remains below historical norms, and this will underpin pricing amid higher demand. At the same time, lower stock availability may also constrain potential activity, especially for buyers looking for family houses.”
More affordable regions leading the way
The spread of house price growth across the UK continues to widen. Annual price rises reached a 10-year high in Wales, Yorkshire and the Humber and the north-east of England with 7.1%, 6.1% and 5% increases respectively.
On the other hand, London is behind the rest of the UK with only 2.2% growth annually. May was the seventh month in a row that the capital saw the lowest level of growth.
Gráinne Gilmore says: “Prices are rising fastest in the most affordable markets as activity continues at elevated levels among first-time buyers and movers looking for more space or a lifestyle change.”
A spotlight on cities and towns in the north-west
On a city level, Liverpool and Manchester continued to record the highest levels of house price growth among the UK’s largest cities. In this list of 20-cities, the top eight spots are dominated by cities in the north and Midlands. Each city in the top eight is also home to average house prices below £200,000
With the second lowest average house price on Zoopla’s list of 20 cities with £132,600, the city by the Merseyside has recorded 7.9% house price growth in the past 12 months. Manchester follows with a 7.2% increase in house prices and is home to an average house price of £187,800.
In the 65 cities and towns monitored by Zoopla, Greater Manchester towns Rochdale and Bolton topped the charts with 9.9% and 8.7% annual house price growth. This further shows the strong growth being seen across Greater Manchester and the wider region of the north-west.
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