Manchester, Birmingham and Newcastle are recording levels of house price increases not seen since 2005.
Manchester is now the number one UK property hotspot, after it was revealed today that property values in the city increased faster than any other in the UK.
Home values in Manchester rose by 8.8% in March compared with the same month a year earlier thanks to a surge in transactions, followed by Birmingham at 8% and then Bristol at 7.3%.
According to the Hometrack UK cities house price index, which tracks price movements across the UK’s 20 biggest cities, Manchester, Birmingham and Newcastle are recording levels of house price increases not seen for 12 years.
Slower growth in southern English cities, including London, Cambridge and Oxford, is acting as a drag on the headline rate of growth for Hometrack’s UK Cities Index, which is now running at 6.4%, taking the average property price to £248,200.
Despite the slowdown in southern English cities, the latest figures suggest that home buyers are shrugging off fears of Brexit to take advantage of record low mortgage rates to buy property in larger regional cities where affordability remains attractive.
City level house prices grew 3.5% in the first three months of this year, the highest quarterly rate of price inflation for three years.
Richard Donnell, insight director at Hometrack, commented: “Buyers outside the south of England appear to be shrugging off concerns over Brexit and a squeeze on real incomes to take advantage of low mortgage rates. This is shifting the dynamics of the housing market. Cities that have been driving house price growth over the last 2-3 years, such as London and Cambridge, are now seeing a significant slowdown while large regional cities continue to register robust and sustained levels of house price growth.”
Donnell accepts that the announcement of the general election on June 8 may create some short-term uncertainty in the property market, but believes that comparing the profile of sales volumes between election years and non-election years there is no material difference.
He added: “Compared to the level of uncertainty over Brexit, it is debateable whether the election will really make a material difference to buyers’ decision in the next two months.
“In our view the current market trends appear well set for the rest of 2017 where above average growth in regional cities offsets weak, single digit increases in southern cities.”