MortgagesOct 24 2014

House price increases vary £56k across the UK

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Average house prices have increased between £61,000 and £5,000 in the 12 months to September, according to Hometrack’s new UK cities house price index.

Recent pressure on UK house prices is weakening off the back of slowing growth in the London market, where the headline rate of growth has reduced after 18 months of consecutive increases, Hometrack said.

The strongest performing cities are in southern England, with London growing the most at 18.1 per cent in the 12 months to September, followed by Cambridge at 17.9 per cent, Bristol at 14.1 per cent, Oxford at 10.5 per cent and Portsmouth at 10.4 per cent.

The weakest performing start with Glasgow at 4.3 per cent, Leicester at 4.8 per cent and Aberdeen, Birmingham and Liverpool all at 5.3 per cent.

The UK average change year on year is 9 per cent and the house prices relative to the 2007 peak are represented by a 0.2 per cent figure.

The average UK house price has grown over £15,000 in the last 12 months.

Fourteen of the cities are registering growth below the UK average of 9 per cent. All of these are outside southern England, with the exception of Bournemouth.

The recent recovery in house prices outside the influence of London’s ‘city region’ has occurred mainly in the last 18 months on improved consumer confidence and low mortgage rates, Hometrack said.

Jeremy Duncombe, director at Legal and General Mortgage Club, added: “The housing market in the UK is very regional. Whilst house prices in London have increased by £60,000 in the last 12 months, in nearly two thirds of cities in the UK prices have risen by less than £15,300.

“This disparity is often hidden behind headline statistics suggesting that house prices are rising at a uniform rate across the country. Uneven growth makes it difficult for policy makers to control house price inflation in London whilst not stifling the recovery in other parts of the UK.

“Sustainable house price increases across all of the country would help to keep homes affordable for first time buyers, as well as allow those who are already homeowners to move up the property ladder.

“Building more houses is a key way to keep prices at a manageable level by ensuring supply is in line with demand.”

ruth.gillbe@ft.com