Update: Read the latest Cities House Price Index for January 2020.
House prices have soared by 54% during the past decade and look set to increase by a further 3% in 2020.
The typical home in one of the UK’s major cities has seen £90,000 added to its value since the beginning of 2010 - the equivalent of 4.4% a year - according to the November Cities House Price Index.Download the full report
London house prices have seen the biggest gains at an average of £204,400, or 74%, despite the difficult market conditions in the capital in the past couple of years, with the majority of this growth coming before 2016.
But other markets have fared less well, with property values in Aberdeen and Belfast ending the decade at broadly the same level as they started it.
How has property performed in the past year?
The average cost of a home in one of the UK’s major cities has risen by 3.4% during the past 12 months.
But the headline figure masks significant regional variation, with Edinburgh seeing the strongest growth of 5.4%, followed by Manchester at 4.7% and Leicester at 4.5%.
At the other end of the scale, prices in Aberdeen have fallen by 0.7% during the past year, while in Oxford they are down by 0.4% and Southampton has seen a rise of just 1%.
What is the outlook for property in 2020?
The outcome of the General Election has removed some of the uncertainty in the property market and is expected to lead to a boost in sales levels as pent-up demand works through the system.
But other issues still remain, with affordability continuing to be stretched in some cities, which is likely to act as a dampener on activity in the year ahead.
As a result, we are forecasting average house price growth of 3% in the major cities in 2020, with lower single-digit house price growth set to be the new normal now that lower mortgage rates have largely been factored into to property values.
How will the market vary between cities?
Cities in the most affordable regions of the country could see gains of 4%, while property values in London are expected to increase by just 2%.
The current north-south divide looks set to continue, with London and cities in the south expected to see lower growth than during the previous decade.
By contrast, more affordable cities, such as Glasgow, Liverpool and Belfast, which are currently recording rises that are twice the level of the average over the past decade, are expected to see stronger gains.
The house price to earnings ratio in London is now 12.7, while in Glasgow it is just 3.7.
Richard Donnell, research and insight director at Zoopla, said: “As we start the next decade in housing, a top priority for the new Government is to ensure we look to remove the barriers to households moving home, with housing policy catering to the different market conditions across the country, while increasing housing choice across all tenures.”
Top 3 takeaways
1. House prices have soared by 54% during the past decade, adding £90,000 to the average home’s value
2. London has seen the biggest gains at an average of £204,400, or 74%, while prices property values in Aberdeen and Belfast have remained broadly unchanged
3. Property prices are expected to increase by 3% in 2020, rising to 4% in cities where affordability is less stretched