What’s the latest?
Glasgow has been revealed as the top performing UK city for house price rises, according to property analysis firm Hometrack – part of the Zoopla family.
Property values in the Scottish city have risen by 7.9% year-on-year, taking the average cost of a home to £122,800. Values may be booming, but Glasgow still offers some of the lowest house prices for a city in monetary terms with the average home costing just £122,800 – the second cheapest city on the list after Liverpool (£118,900).
Edinburgh, which has topped the list in previous months, comes in second place at 7.6%, according to Hometrack's latest UK Cities House Price Index.
Cities in the Midlands and the North of England also fare well, sitting in the top five of the table – well ahead of less affordable cities in the south – with Leicester, Birmingham and Manchester coming in third, fourth and fifth position respectively.
At the other end of the scale, property values inched ahead by just 0.7% in Oxford, while they rose by 2% and 2.7% respectively in Cambridge and London.
Despite slower growth rates in London and the South East of England, the figures reveal that the UK property market has had a strong finish to the year. The average value of a home in the 20 cities analysed has risen by 6.3% over the past year – up from 4.9% a year ago.
Why is this happening?
Richard Donnell, Insight Director at Hometrack, explained: “Over the last 12 months there has been a dramatic south to north shift in the momentum of house price growth, which has culminated in Glasgow registering the fastest rate of house price inflation in the UK.
"In Glasgow, Edinburgh and many other large regional cities affordability is less of a barrier than in London and the south east, particularly for first time buyers, and with mortgage rates remaining low this is helping to stimulate demand and increase activity in these markets.”
Who does it affect?
When it comes to the capital, house prices in London have risen by just 2.7% over the past year. However, despite a slowdown in growth rates, the average property price in London is still 58% higher than at the peak reached in 2007 before the housing market correction. With a current average property value of £491,700 the capital also remains the most expensive UK city in which to buy a home.
Elsewhere in the southern half of the UK, Cambridge prices are 54% higher than they were in 2007, while in Oxford prices have risen by 47%. Unsurprisingly, these strong gains have made it increasingly difficult for first-time buyers to get on to the property ladder in these cities.
Aberdeen is the anomaly for Scotland’s cities and comes bottom of the table, with values slipping 3.7% over the past year. This decline is likely to reflect the current health of the North Sea oil industry, which is a significant driver of house prices in the city.
Cardiff, which is the only Welsh city included in the list, comes mid-table in 12th place, with a 5% increase in property prices year-on-year and a current average value of £202,200.
Above: A modernised four-bedroom mews house in Glasgow's sought after West End on the market for £415,000
What’s the outlook?
Hometrack is optimistic about the state of the property market going into 2018 and anticipates further price growth, which will be driven by the continued recovery of regional cities.
Richard Donnell added: “A year ago, we predicted that UK city house price growth would be 4% as a continued recovery in regional city house prices would offset very low nominal growth in London.
“We expect 2018 to follow a similar pattern. With the clouds of uncertainty around Brexit lifting very slightly, we expect regional cities to continue to deliver above average house price growth in 2018.
“For London we expect the rate of house price inflation to remain in low single digits over the course of 2018.”
Top 3 takeaways
- Glasgow tops the list for house price growth, followed by Edinburgh, Leicester, Birmingham and Manchester
- House price inflation in all cities rose to 6.3% in November, up from 4.9% a year ago
- Hometrack expects a continued regional recovery to drive further property value growth in UK cities in 2018