House Prices Increase in Every UK City for the First Time Since 2016
For the first time in over three years, 20 major UK cities have recorded house price growth on a year-to-year comparative basis at the same time.
Data from the latest Zoopla Cities Index highlights an average 2.8% price increase, with key markets in London and Aberdeen starting to see growth once more.
House prices in the capital grew by 0.2% compared to February last year, while the growth in Aberdeen stood at a far healthier 1.8%. That compares to high growth cities including Leicester, Manchester and Glasgow where prices increased by 6.8%, 5.8% and 5.7% respectively, highlighting the continued strength in markets north of London where initial prices started low with scope to grow.
A more long-term comparison highlights that Manchester is the best performing market today, compared to February 2017 with 6.7% price growth, followed by Birmingham and Nottingham at 6.4%.
Overall, the data is encouraging and indicates the underlying strength in the current property market. CEO of Bricklane, Simon Heawood comments that: “Despite great political uncertainty, house prices are rising across the country, even in London average house price growth is now back to positive territory.”
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“With house prices rising above inflation and rental yields further enhancing returns, property continues to represent an attractive investment for many, particularly in the context of rock bottom cash interest rates and stock market volatility.”
Potential outlook for 2019
While there are some reports that suggest there’s a lack of supply of new properties onto the market and that buyers are biding their time in the hope of potentially snapping up a post-Brexit bargain; the fact that average prices in the 20 tracked cities in Zoopla’s Index have recorded price growth for the first time in three years, indicates an active property market across the UK. This includes zones such as London where prices had fallen to narrow the gap with buyer affordability.
Key buyer demographics, particularly first-time buyers, have spearheaded demand with the number of mortgage approvals for Small Deposit Agreements rising. Such mortgages, which are favoured by those taking their first step on to the property ladder, through schemes such as Help-to-Buy, are increasing each year.
Two of the most active first-time buyer regions include Yorkshire and the North West, where house price growth in cities such as Manchester, Sheffield and Leeds have led the UK over the last 24 months.
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Whilst political uncertainty might have seen some buyers reduce the urgency of their search for a new home, there’s strong evidence in the property market uplift since the start of the year. Halifax’s report last month indicated a record monthly rise in house prices, the findings went on to conclude that there is much pent-up demand in the market with people actively searching to find the right property and buying opportunity.