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House Prices See Stronger Growth in Regional Cities

Hometrack’s UK Cities House Price Index shows that a recent surge in investor activity has boosted house price growth in regional cities.

Hometrack’s UK Cities House Price Index shows that a recent surge in investor activity has boosted house price growth in regional cities.

The report represents the only analysis of housing market trends at a city level, analysing 20 UK cities. The research shows that regional cities dominated the sector in the last quarter, as they were the greatest recipients of investor interest in the months prior to the EU referendum on 23 June.


In leading position for house price growth, Liverpool saw a 5.4% rise from the previous quarter, followed by Bristol at 4.2%, Manchester at 3.9% and Leeds at 3.7%.


In an annual comparison, Hometrack reports that Bristol saw the highest growth at 14.1% from May 2015 and the average home value now sits at £250,900. London saw the second largest growth at 13.8% year-on-year increase with the average set at £472,100.


Overall, the UK saw positive market activity ahead of the referendum, with prices across the country rising 3.6% from the previous quarter and 11.2% from May 2015, bringing the average property value across the UK to £200,200.


Across the 20 cities included in the report, there was also positive activity in the average values of properties, with a 4.4% rise over the previous quarter and an 11.2% year-on-year rise.


The reports also shed light on how the referendum results are likely to impact the short to medium outlook on the UK’s housing market. It suggested that transactional activity will most likely see the greatest impact from the referendum as most buyers await further market clarity before making a purchase.


Nonetheless, the Bank of England’s Governor Mark Carney has signalled his interest in cutting interest rates over the summer as a way to combat a post-Brexit slowdown in the market.


Ultimately, Hometrack’s report emphasises that the fundamentals of the UK’s housing market have not changed with record-low mortgage rates and a broad imbalance between demand and supply continuing to define the market.