The UK’s largest regional cities are continuing to outperform London at the start of 2017, with the rate house price growth surpassing the capital.
Hometrack’s UK Cities House Price Index has revealed that house prices in the property hotpots of Manchester, Birmingham and Liverpool are growing faster than in London, rising by 8.3%, 7.4% and 7.1% year-on-year over the course of January.
Manchester is the fastest growing city outside of southern England, and the third fastest growing in the UK behind Bristol and Oxford, said Hometrack.
In the capital, house price inflation has continued to subdue, as year-on-year growth in London fell to 6.4% for the city, securing a 42-month low for house price rises.
The continued challenges facing the London property market has led to the capital falling to eighth in the price inflation rankings, with Hometrack restating their expectation that London’s house price growth will continue to slow over 2017 to a rate of 0%.
Slower house price growth in the capital was to be expected said Hometrack, following growth of 85% since the financial downturn in 2009. Regional cities, however, should not face the price ceiling at the same time as London, said the report.
Commenting on the potential growth possibilities in the regions, Hometrack said:
‘The contrast to cities outside southern England is stark with prices in Newcastle, Glasgow and Liverpool just 13-16% higher than their post global financial crisis lows … In our view there is material upside for house prices in the coming years where the recovery since 2009 has been limited…
‘The beneficiaries will be cities where investment in employment, infrastructure and regeneration will help stimulate the local economy. The timing and scale of future house price growth will, of course, depend upon the outlook for jobs, income and mortgage rates.’
Earlier this week, a new £400 million fund to support the growth of small to medium enterprises (SMEs) was announced for the Northern Powerhouse, to help unlock the region’s further economic potential.