House price growth has reached 12-year highs in Manchester, Birmingham and Newcastle as demand continues to climb outside the south of England.
Manchester has held on to the top spot in the latest Hometrack UK Cities house price index with an annual growth rate of 8.8 per cent, while Birmingham has surged into second place with year-on-year growth of 8 per cent.
Bristol dropped to third place with annual growth of 7.3 per cent, followed by Edinburgh (7.1 per cent) and Glasgow (6.8 per cent).
An uplift in prices in regional cities helped push the 20-city average growth rate to 3.5 per cent in the first quarter - the highest quarterly rate of growth since May 2014 – while the annual rate of increase rose to 6.4 per cent.
In London, however, price inflation slowed to a five-year low of 4.9 per cent year-on-year, making it one of the five slowest-growing cities alongside the likes of Oxford (3.7 per cent) and Cambridge (1.7 per cent).
Regional cities are benefiting from attractive housing affordability, record low mortgages rates and an improving economic outlook, with prices being forced upwards as supply only just keeps pace with demand, according to Richard Donnell, insight director at Hometrack.
Mr Donnell said: “Cities that have been driving house price growth over the last two to three 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.
“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.”
| Town/City | Region | Total no. properties for sale | % | |||
| No. of properties below £100k | % below £100k | No. of properties below UK average* | below average house price | |||
| Hull | Yorkshire | 1063 | 530 | 50.00% | 977 | 91.90% |
| Birkenhead | North West | 268 | 147 | 54.90% | 246 | 91.80% |
| Kilmarnock | Scotland | 202 | 106 | 54.60% | 182 | 90.10% |
| Middlesbrough | North East | 662 | 320 | 48.30% | 596 | 90.00% |
| Burnley | North West | 589 | 291 | 49.40% | 524 | 89.00% |
| Grimsby | Yorkshire | 295 | 169 | 57.30% | 261 | 88.50% |
| Bradford | Yorkshire | 1383 | 625 | 45.20% | 1220 | 88.20% |
| Wigan | North West | 437 | 159 | 36.40% | 384 | 87.90% |
| Neath | Wales | 754 | 318 | 42.20% | 656 | 87.00% |
| Blackpool | North West | 1328 | 515 | 38.80% | 1155 | 87.00% |
| Stoke | W Midlands | 1327 | 583 | 43.90% | 1144 | 86.20% |
| Sunderland | North East | 622 | 312 | 50.20% | 530 | 85.20% |
| Merthyr Tydfil | Wales | 256 | 146 | 57.00% | 216 | 84.40% |
| Darlington | North East | 488 | 239 | 40.00% | 410 | 84.00% |
| Doncaster | Yorkshire | 857 | 306 | 35.70% | 720 | 84.00% |
| Scunthorpe | Yorkshire | 335 | 111 | 33.10% | 281 | 83.90% |
Tom Oliver, IFA at Newcastle-based Lamb and Associates, said he was ‘pleasantly surprised’ by the city’s healthy growth figure.
He said: “I have not seen that, but it is good news that it is happening.
“Whether or not the index is reflective of what is happening on the ground I am not certain. It may be happening in small places in certain areas that have lagged behind.
“I think a lot of the doom and gloom from Brexit has not materialised. One of the big employers in this area is Nissan; we were told leaving the European Union would see the end of that, but it has not happened.
“If house prices are on the rise, it is good news for homeowners but not so good for first-time buyers. We have got to have housing increase as well.”
simon.allin@ft.com
