Twelve of the UK's largest regional cities are now seeing higher price rises than central London as the capital's performance continues to struggle.
These findings, from property consultancy Hometrack, show that Glasgow prices are rising by an annual average of 7.6 per cent, Manchester by 6.8 per cent and Leeds by 6.6 per cent, with several other cities close behind.
By contrast some of the capital's most valuable boroughs such as Kensington & Chelsea and Hammersmith & Fulham are rising only 3.4 and 5.1 per cent respectively.
Hometrack says growth has slowed across all of central London to just 3.0 per cent although it remains 11.8 per cent in Greater London.
The consultancy says that although house price gains in London's outlying boroughs have registered off a lower base, they have been driven by savvy homeowners migrating away from central London, which in Hometrack's words is monopolised by international buyers.
House price growth is holding up better than expected as a result of a lack of new supply of homes for sale and record low mortgage rates attracting buyers into the market says Richard Donnell, Hometrack's research director.
The pattern that we are currently seeing in regional cities is similar to what we witnessed in London from 2011 to 2013, except the majority of demand for housing in these cities is coming from domestic owner occupiers. It is not being boosted by international buyers or excess investor demand, as was the case in London he says.
Comments
Kensington & Chelsea council have enforced a ban on 'iceberg' homes. These are properties that have 2-3 level basement conversions - large enough to fit a swimming pool and a variety of other entertaining features. Of course, by doing so the council have increased that value of existing properties that are already converted.
We are experiencing a ripple effect and central London prices must be cooling down now. This ripple effect determines that as property prices become unaffordable people starting to look further afield zones 2-7 and M25.
In cities like Leeds and Manchester, there is a LOT of investment coming from London from investors who can not buy in London.