City level house price inflation is on track for a 10% growth in 2015 as price growth accelerates in regional cities, according to Hometrack’s UK Cities House Price Index.
The large, regional cities outside southern England have recorded an accelerated growth, with Glasgow taking the top spot with an annual growth of 8.3%, Manchester with 7% and Liverpool up by 5%.
These are the highest rates of annual house price growth since 2007.
Both Glasgow and Manchester experienced a house price lull in 2012, but both cities have since recovered.
Liverpool house prices declined between 2007 and 2013, but have since increased by 10.5%. Despite this recovery, Liverpool performed the weakest in the index, as the average house price of £109,000 is still 13% lower than the 2007 peak.
The recovery emerging in these regional cities starkly contrasts London’s house price growth. In the highest value markets of Central London, average house prices are up by more than 100%, however now, they have recorded some of the lowest annual levels.
In the highly affluent Kensington and Chelsea borough, prices have decreased by 2.6% and in Westminster 1.3%. This is due to a combination of tax and currency changes in the last year.
Richard Donnell, Director of Research, Hometrack commented: “Many corporate investors and developers are looking to the major regional cities in search of better value for money in new investments relative to London.”
“The outlook for the next 12 to 18 months will be a balance between how much the high growth cities slow on affordability pressures and how much more momentum will come from cities where the pick-up in house prices is just beginning to pick up,” he added.