21st August 2015
The cost of buying a home in Britain’s biggest cities jumped by the largest amount in over a decade this summer.
Research by Hometrack showed that supply in the cities is being outstripped by demand causing prices to increase 4.3% in the three months to July, pushing the average city property to £227,100.
The most popular cities have seen large house price rises. Cambridge has seen the largest rise at 10.9% year-on-year and Oxford comes in second place with a rise of 9.8%, and London comes in third at 9.4% price growth.
The level of house price inflation in the City is now 8.5%, up from 7.2% in April and is expected to grow by 10% this year.
This means first-time buyers and homemovers will face the extra burden of trying to find increasingly large deposits and taking out larger mortgages.
However, it’s not all bad new, nine out of the UK’s 20 biggest cities still have average prices that are below 2007 peaks, although the gap is narrowing rapidly.
The three cities which are furthest below the 2007 peaks are Belfast, where the average house price is 47.6% lower than eight years ago, followed by Liverpool at 13.2% lower and Glasgow where they are 11.2% lower.
Hometrack director of research Richard Donnell said: ‘There remains further upside for city level house prices over the remainder of 2015.’
Despite being third on the list of fastest growing house prices, London properties are 40% higher than in 2007.
‘As an international city, London is out on its own, setting new highs for prices and affordability,’ said Donnell.
‘How long this can be sustained is down to the prospects for the different segments of demand, specifically international buyers, domestic investors and domestic home owners.’