Hometrack says its index of house price growth in major cities is already 9.4 per cent per annum and looks set to reach 10 per cent by the end of December.
The large regional cities outside southern England are recording an acceleration in growth off a low base, says the data company. Glasgow (up 8.3 per cent), Manchester (up 7.0 per cent) and Liverpool (up 5.1 per cent) are registering the highest rates of annual house price growth since 2007.
Hometrack says the recovery which is only now emerging in these large regional cities contrasts strongly with the rise of London’s house prices where average values are up by a storming 70 per cent since 2009 (and by over 100 per cent in the highest value markets in central London).
It is these high value markets that are now recording some of the weakest levels of house price growth (Kensington and Chelsea down 2.6 per cent and City of Westminster up only 1.3 per cent over the past year, for example) as tax and currency changes impact demand after a period of stellar price appreciation.
“Improving consumer confidence and low mortgage rates are boosting demand in cities where the recovery in house prices is in its infancy. While southern cities have been in recovery mode for over six years with price gains of up to 70 per cent, the large regional cities have seen far more modest price rises over just the last three years” says Richard Donnell, Hometrack’s director of research.
“Further house price growth is likely to improve market confidence as it pushes down loan to values on mortgaged homes and creates capacity for households to access cheaper credit. Many corporate investors and developers are looking to the major regional cities in search of better value for money in new investments relative to London” he says.