The latest UK Cities House Price Index report reveals that there has been a surge in house prices in a number of regional cities across the UK, with Liverpool and Bristol seeing the most impressive increases. The report published by market analysis experts Hometrack analyses the housing market across twenty cities in the UK, monitoring any gains or losses in the overall average prices throughout each quarter and year.
On average, the overall house price is now £237,500, which is a gain of 11.2% year on year and 4.4% quarter on quarter. The report also states that it believes that the price inflation is only going to increase.
Liverpool and Bristol Lead the Way
The highest relative growth over the last quarter belongs to Liverpool, which has seen house prices up 5.4% quarter on quarter. The fastest annual growth rate belongs to Bristol, where the prices have increased by 4.2% quarter on quarter and 14.1% year on year. In contrast, London has seen quarter on quarter growth of 3.7%, which is still considered to be strong growth. The largest quarter on quarter growth in total has been seen in cities far away from the capital, with 12% in Aberdeen, 16% in Belfast and a huge 19% in Edinburgh.
Referendum Result to have an Effect Soon
The Hometrack report also reveals that it believes the recent referendum result will have some effect on the housing market. The report states: “The city level impact is hard to gauge but we expect the immediate impact to be felt in London where affordability levels are stretched and the market was already facing headwinds. The immediate and short term impact of the EU referendum result will be widespread uncertainty amongst buyers and sellers across the housing market. This is against a backdrop of already subdued turnover. While sales volumes have recovered from their 2009 lows, sales as a percentage of stock remain low by historic standards at around 5%, or a move every 20 years.
“House price falls would require forced sellers, driven by higher mortgage rates and/or rising unemployment. While short term turmoil in financial markets will impact market sentiment, it is too early to say how the vote to leave will impact the real economy. Builders had already been slowing starts ahead of the vote and on concerns over the Starter Homes initiative. This cautionary approach is unlikely to change until the outlook for demand improves.”
Fundamentals of Housing Market ‘Unchanged’
The Hometrack report also shows that there hasn’t been any major upheaval to the UK housing market, with the report stating that the UK doesn’t have a problem with housing demand, with the main concern being whether buyers and sellers will still feel confident to participate in the housing market during the short-term. The report concludes with the hope that the turmoil will eventually be put behind us and the market will soon be back to business as usual.
