London remains the boiler room of the housing market, but northern cities are currently fuelling the strongest rate of property price growth.
Residential property prices in cities such as Leeds, Manchester, Birmingham, Liverpool and Nottingham have increased significantly over the past year, a survey has suggested.
Focusing on housing market activity in the last quarter, the highest rates of growth have been registered in lower value, high yielding cities where house prices are rising of a lower base – Glasgow (5.2%), Liverpool (4.4%), Manchester and Nottingham (3.4%).
But despite strong growth in large regional cities in the north of England and Scotland, UK city house price inflation is cooling, owed primarily to a sharp slowdown in London and other high value cities across the south of England.
Hometrack, which monitors property prices in 20 UK cities, said that overall home price growth over the last three months slowed to 9.5% July after 12 months of higher growth.
The shift in momentum reflects the fact that capital growth across a number of cities in southern England have slowed over the last quarter. In the three months to July, house prices in London rose by just 2.1%, the lowest quarterly rate since February 2015. Furthermore, Bristol, which is the fastest growing city over the last 12 months, saw growth over the last three months slow to 2.6% from a recent high of 5% in May 2016.
This latest report confirms that the housing market in London, which is very much the boiler room of the residential property market, is no longer roaring, as rising demand from buyers and falling housing supply suggests that house price growth in the capital will continue to slow over the rest of the year.
In contrast, the northern regional cities look set to continue fuelling overall growth as buyers take advantage of record-low borrowing rates and considerably cheaper homes.