Northern areas of the UK are the latest cities to experience house price recovery with values up 7.9 per cent
According to the latest cities house price index by Hometrack, property values in major northern areas were up by 7.9 per cent between January 2014 and January 2015.
On a quarterly basis prices rose 1.1 per cent during Q4 of last year, reflecting the slowdown experienced towards the end of 2014.
The data shows that the extent of annual growth ranged from 4.1 per cent recorded in Glasgow to 13.6 per cent in London. This puts house values at four times the average earnings in Glasgow and 12 times the average earnings in the capital.
Continuing the recovery
Six out of the 20 cities in the study reached post-turndown lows two years ago but prices have now risen nine per cent on average and are set to drive growth in the future.
Property prices are up by as much as £144,000 among cities that “bottomed out” in 2009 and overall the momentum behind UK growth has shifted towards northern cities like Liverpool and Sheffield and away from those that began to recover in 2009.
During the past six years, Oxford and London house prices have grown by 55.2 per cent and 42.1 per cent respectively while cities in which recovery only began two years ago saw growth of much higher values – equalling between three and six times the average earnings.
This includes Edinburgh (10.7 per cent), Leeds (10.1 per cent) and Newcastle (eight per cent).
In total there are 14 cities in the UK that have experienced property price growth since 2009, although the length of the recovery period does not offer a guide to the level of price growth.
Director of Research for Hometrack, Richard Donnell, said it is important to look beyond just UK averages:
“A focus on average UK house price movements masks critical trends at a city and sub-regional level,” he said.
“This is important for both businesses operating in the housing market and policymakers trying to address the challenges of growing housing supply.”
He added that rising prices reflect the strength of local economies and housing demand as house prices continue to bounce off a low base as pent up demand returns to the market supported by low mortgage rates and rising earnings.