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House Price Boom Spreads Across UK
Homes in all of the country's 20 largest cities have seen their values increase by at least 5% annually for the first time in more than a decade, as the housing market recovery ripples out beyond the South East.
Property analyst Hometrack said that growth in house prices across the 20 UK cities over the last year has ranged from a 17.3% increase in London to a 5.5% rise in both Liverpool and Glasgow.
This marks the first time since November 2004 that all 20 cities have registered year-on-year house price increases of more than 5%.
The report said that by the end of the year, prices in some cities outside the South East could be rising at a faster month-on-month rate than those in London.
After London, Bristol has seen the second biggest annual upswing in property prices, at 13.2%, followed by Cambridge at 12.2%, Portsmouth at 9.4% and Southampton at 9.0%.
Values have increased over the last year by 8.9% in Oxford, 8.7% in Edinburgh, 8.3% in Belfast, 8.1% in Nottingham, and by 7.9% in both Aberdeen and Cardiff.
On average, prices have increased by 9.2% over the last year to reach £185,700.
Despite the widespread uplifts, Hometrack said that there is also "clear evidence'' that the upward pressure on house prices is starting to ease amid weakening demand from buyers.
It said that in the last three months, average UK house prices have grown by 0.6% per month, which is almost half the rate of the increases of 1.1% recorded in the three months to May this year.
Hometrack said the majority of cities are now starting to show signs of a cool down in the underlying pace of house price growth, with Oxford and Cambridge in particular seeing prices "come off the boil quite sharply'' in recent months.
But Glasgow, Edinburgh and Newcastle are bucking this general trend of slowing price growth. These cities saw house prices increase more gently earlier this year and are now seeing a pick-up.
Hometrack also suggested that price growth in Edinburgh and Glasgow has also been boosted by a post-independence referendum "bounce''. There had been some signs of the housing market in Scotland grinding to a halt as potential buyers waited for the outcome of the referendum.
Richard Donnell, research director at Hometrack, said: "The pick-up in house prices that started two years ago has spread across all UK cities.''
But he continued: "This latest analysis shows that momentum in house price increases is starting to slow, with less pent-up demand for housing than two years ago.''
Toughened mortgage lending rules came into force in April which mean that applicants have to provide more evidence to back up what they say about their spending habits and lenders also have to apply "stress tests'' to make sure that borrowers could cope with interest rates rising.
There have been signs that this has dampened the market slightly, alongside suggestions that buyers are becoming more sensitive about sellers' asking prices as speculation continues over exactly when the Bank of England base rate is likely to increase, pushing up borrowing costs.
Mr Donnell said he expects the rate of house price growth to slow further as the year comes to an end.
He continued: "However, there are still bright spots of activity amid reports of a wider national slowdown.
"For the first time since the financial crisis, an improved economic outlook has seen house prices in cities outside the south of England rising off a low base.
"By the end of the year, we could well see monthly house price growth in London slipping below that of some of the major cities outside the South East.''
Housing Minister Brandon Lewis said: "This Government is committed to supporting creditworthy, hardworking people who want to buy a home of their own.
"Thanks to Help to Buy, over 54,000 people have become homeowners with a fraction of the deposit they would normally require.''
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