House Price Growth "Holding Up"
House prices in many of the UK's largest regional cities, including Glasgow, Manchester and Leeds are rising at a faster rate than those in central London for the first time in a decade, according to property analyst Hometrack.
The growth in property values was holding up "better than expected'', with ultra-low mortgage rates and growing confidence as consumers started to feel better about the state of their finances helping to inject more activity into the housing markets of big regional cities, Hometrack's report said.
Meanwhile, it found that political uncertainty, with the possibility of a mansion tax, and affordability pressures were taking some of the steam out of the property markets in London's most expensive boroughs.
In March, year-on-year house price growth was 7.6% in Glasgow, 6.8% in Manchester, 6.6% in Leeds, 9.7% in Bristol and 6.7% in Cardiff, while annual price growth of between 3% to 6% was recorded in central London boroughs such as Kensington and Chelsea, Camden, Hammersmith and Fulham and Westminster.
Hometrack said it was the first time since 2005 that it had recorded major cities outside central London out-performing boroughs in the heart of the capital.
The other major cities where annual price growth was now stronger than in central London were Oxford, Sheffield, Portsmouth, Southampton, Cambridge and Aberdeen, as well as London's outlying boroughs as people look further afield for value.
The housing market was also starting to see the effects of a complete overhaul of stamp duty, which was announced in December.
While the new stamp duty charging structure has made the tax cheaper for the majority of people liable to pay it, the tipping point where it has become more expensive is for buyers of top-end homes worth over £937,500.
Richard Donnell, director of research at Hometrack, said the housing market trends now being seen in regional cities were similar to those seen in London a few years ago, as the first signs of the recovery emerged.
But one significant difference was that the central London market had been boosted by wealthy overseas investors in recent years, whereas the recovery in the regions was being driven by people who already lived in these areas.
Mr Donnell said this explained why the level of growth in the regions was more modest than that which had already been seen in London.
Mr Donnell said: "House price growth is holding up better than expected as a result of a lack of new supply of homes for sale and record low mortgage rates attracting buyers into the market.''
In further signs that house prices were poised to push up further, the Royal Institution of Chartered Surveyors (Rics) recently reported that a lack of homes to choose from was putting an upward pressure on values.
Property website Rightmove also reported this week that across England and Wales, average house sellers' asking prices reached a new all-time high in April of £286,133.
Mr Donnell continued: "As London's first-time buyers grapple over the affordability of the first rung on the property ladder, there is an opportunity to buy ahead of the curve.
"Boroughs such as Newham, Redbridge, Greenwich, and Barking and Dagenham offer that elusive mix of short-term affordability and good capital growth in the longer term.''
Here are the average prices of a house in the UK's major cities in March, followed by the year-on-year rate of price growth, according to Hometrack:
:: Oxford, £373,100, 13.4% :: Glasgow, £111,700, 7.6% :: Leeds, £145,400, 6.6% :: London (including the surrounding commuter areas), £417,500, 11.8% :: Manchester, £138,700, 6.8% :: Sheffield, £126,100, 6.3% :: Newcastle, £121,800, 5.0% :: Liverpool, £109,900, 3.5% :: Birmingham, £135,000, 5.2% :: Bristol, £219,500, 9.7% :: Leicester, £142,600, 5.2% :: Nottingham, £126,600, 5.8% :: Bournemouth, £239,700, 5.6% :: Portsmouth, £193,200, 6.7% :: Cardiff, £178,200, 6.7% :: Edinburgh, £193,400, 5.3% :: Southampton, £192,300, 6.8% :: Belfast, £113,100, 5.2% :: Cambridge, £347,400, 7.4% :: Aberdeen, £187,500, 7.8%