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TODAY'S OTHER NEWS

On The Up: UK’s city house prices rise 54% in a decade

Major UK cities have seen average house price rises of 54 per cent in the past decade - an increase of £90,000 or £9,000 a year.

The data, from Zoopla, shows city house price growth varying widely since 2010, reflecting variations in underlying demand, which in turn are driven by the relative strength of local economies. 

London has registered the highest price growth over the last decade, up 74 per cent: the vast majority of this growth came before 2016 when stretched affordability was compounded by multiple tax changes that reduced demand and saw prices drift lower.

In contrast, house prices in Belfast and Aberdeen are virtually unchanged since 2009 – albeit for different reasons. 

Aberdeen fell victim to the well-documented oil price crash post 2015, and Belfast, having registered six years of house price falls between 2007 and 2013, was the last city to register a sustained recovery in house prices.  

The trend in London over the last decade has been mirrored in Oxford and Cambridge and, to a lesser degree, by cities across the southern England. There is a clear north south divide in price growth, with London and southern cities registering price growth that is much lower than the average in the latter half of the decade.

Above average price growth is being registered in the most affordable cities with Glasgow, Liverpool and Belfast recording growth that is more than twice as fast as the annual average over the last decade. 

Zoopla expects house price growth to run ahead of the UK city average over 2020 in the most affordable cities.  

Looking ahead, Richard Donnell - research and insight director at Zoopla - says: “In the wake of the election result, much has been made of the likely impact on the housing market and wider economy. The election result provides an element of certainty for households looking ahead to 2020, but the result changes very little in terms of housing market fundamentals. 

“While we expect some pent-up demand to return to the market in 2020 quarter one, the affordability of housing across the country will dictate the level to which prices will increase in 2020. Lower mortgage rates have already been reflected in higher house prices, which means house prices are set to rise at a lower rate in future – more in line with average earnings.  We expect UK city house prices to increase by three per cent over 2020.

“That said, the most affordable regional cities still have some headroom for growth, and we expect them to register price growth of up to four per cent 

“Growth will remain more muted in southern England despite modest improvements to affordability. We expect a limited boost to sales volumes in London over 2020, but for price growth to be constrained by affordability factors with London prices expected to rise by two per cent over the year.”

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