Manchester has the fastest-increasing house prices

Manchester has the fastest-increasing house prices

Manchester now has the fastest-increasing house prices of all UK cities, knocking Bristol off the top spot as London slipped to tenth place.

The north-west city witnessed 8.8 per cent annual price growth on the back of a more than 40 per cent surge in transactions in the last three years, according to the February 2017 Hometrack UK Cities House Price index.

Bristol still occupied top spot in January with price increases of 9.5 per cent, but growth in the south-west city has been sliding steadily since the middle of 2016 as Manchester’s house prices have continued to climb 

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In the capital, meanwhile, house price inflation slowed to 5.6 per cent year-on-year as the number of sales fell by 8 per cent due to weakening investor demand, affordability pressures and uncertainty over Brexit.

Manchester’s gains were mirrored in other regional cities, with Birmingham (7.4 per cent), Liverpool (6.8 per cent) and Leicester (7.2 per cent) all seeing strong growth on the back of 30 per cent to 40 per cent surges in transaction volumes over the last three years.

Over the course of the year, London has fallen from top spot with 12.8 per cent growth, to tenth position behind Portsmouth, Bristol, Glasgow and others.

Across the UK, city house price inflation is running at 6.4 per cent compared to 7.8 per cent in 2016, with the average price now £246,100.

Richard Donnell, insight director at Hometrack, said: “Levels of housing turnover across UK cities are expected to remain broadly flat over 2017. 

“There is some further upside for sales volume in regional cities but much depends upon how would be buyers respond to external factors, not least the impact of lower real wage growth, the potential for higher mortgage rates and whether demand will be impacted by the triggering of Article 50 at the end of the month.

“Buyers are fully aware of the government’s plans and timescales for Brexit, but there remains huge uncertainty over what this means for the economy over the next two to three years and beyond. 

“In cities where affordability remains attractive we expect demand to hold up in the short term, albeit with slower growth in sales volumes. Overall we continue to expect the rate of house price growth to moderate over the rest of 2017.”

David Copland, director of mortgage services at LSL Financial Services, said: “Liverpool, Birmingham and Manchester are all experiencing exceptional growth thanks to a booming job market and improved transport links.

"More people are therefore moving their attention away from the London property market, especially when looking to secure their first home. 

“It will be interesting to see if the northern powerhouses continue to grow at this pace once Article 50 is triggered; but with investment continuing to flow, I expect this only to continue.”