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London among UK major cities with strong house price growth this year

Data from Hometrack show the top 20 UK cities with strong house price rise this year exceeding the national average.

Hometrack have released data showing homes in UK Cities with 8.5% growth year on year ahead of the rest of the country with a 6.2% average.

Since the 2007 peak property prices the top twenty cities have increased by 18.6% compared to the average of only 5.3%. City price growth is accelerating helped by low mortgage rates, limited supply and a 32% increase in transaction volumes.

For home movers buying in a city the gap between their current home and the next increases which means they need a larger mortgage or higher earnings.

Every city in the country, other than Aberdeen, has seen prices rise in excess of the national average earnings of 2.4% per annum.

Over a quarter, the top 20 cities have seen prices up by 4.3%, the highest rate since 2004 and average prices are now £227,100.

Cambridge leading the way on growth

London is no longer the only city with stellar house price inflation.

Cambridge is now leading the way with a 10.9% rise year on year followed by Oxford higher by 9.8%, London with  9.4% Bristol with 8.6%, Edinburgh up 8.0% followed by Southampton rising by 7.1%.

These increases in prices give homeowners an advantage as remortgage buyers can increase their mortgage, releasing capital for home improvements such as a new extension, kitchen or bathroom.

Since the house price peak of 2007, three cities are leading the country with Cambridge house prices rising by 43.7%, London with 39.9% and Oxford 32.7% higher.

The strong growth in house prices for these areas make it harder for first time buyers to buy their first homes and home movers to afford moving up the property ladder.

Rising house prices in these areas allows the equity release buyer to access cash using a lifetime mortgage and use this to consolidate debt, for home improvements or holidays.

Despite the recent growth in house prices for UK Cities, nine of the twenty cities have average prices lower than the previous peak.

Three cities remain significantly below the 2007 peak, where average house prices for Belfast are 47% lower than eight years ago, Liverpool are 13.2% lower and Glasgow 11.2% lower.

Prime central London lagging behind

Luxury homes in prime central London had experienced a rise of 86% from their 2009 and is now one of the worst areas lying third from the bottom, says Hometrack.

Prime central London properties increased by 1.6% in the last year, just above Sunderland with 1.7% and Dundee with 0.7% growth.

There are just over 100,000 of these luxury properties represent 3% of London homes and located in Mayfair, Belgravia, Knightsbridge, Marylebone, Kensington and Hampstead with an average price of £1,044,250.

Hometrack have said for areas other than prime central London, there is room for catch-up in prices for lagging UK Cities.

Cities such in Scotland have seen a resurgence in growth since the Scottish referendum with Glasgow rising 3.7% and Edinburgh 6.0% in the last quarter alone.

For buy-to-let landlords with existing properties the rise in house prices creates more equity which they can benefit from if they sell in the future.

Low mortgage rates, economic growth and rising earnings is expected to stimulate demand increasing prices for most UK Cities. Hometrack are expecting house price inflation to remain on course for 10% year on year growth.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Learn more by using the mortgage cost calculators, equity release calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise or even reduce inheritance tax owed by your beneficiaries.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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