Residents in Edinburgh, Birmingham, Glasgow, Manchester and Nottingham will see the biggest growth in house prices over the next four years.
The figures are according to the property index Home Track in their UK Cities House Price report.
This report tracks house prices across 20 UK cities, as well as regionally and nationally and has recorded year-on-year increases of 7.7% in Edinburgh, 6.7% in Birmingham and 6.7% in Manchester.
The figures come after years of weak growth in cities outside of the capital.
In 2013, the markets in London and the rest of the UK was experiencing one of its widest gaps. At this point, residential cities were not experiencing substantial growths. But over the past two years, house prices have increased in these areas, presumably down to improved consumer confidence, better employment rates and what the Index calls, “attractive affordability metrics.”
However, while the house prices are shooting up in major residential cities, the rise still isn’t going to match those expected in London. The capital still has far more investment interest and overseas buyers than anywhere else in the UK. But despite this, there has been a slight drop in the London property market, possibly as a reaction to the unsustainability and affordability of the house prices in the city. The Index forecasts the decrease to continue to be in line with more realistic terms over the next two or three years.
London house prices have risen by 86% since 2009 and in 2016 prices rose 6%. However, the past twelve months have seen a fall to 1.8%.
This still sees property affordability in the capital being the equivalent of 14.5 times the median earnings, with the average price of a home in London is £412,000.
Oxford, seen as one of the most expensive cities to buy outside of London, has an average house price of £425,700 but has seen sluggish growth in the past twelve months with a rise of just 0.9%.
Overall, house price inflation is running at 5% which is 4% up from this time last year.
The figures are based on the past 24 months of house prices, and takes into account the currently low mortgage rates and growing economy. The Index states that these growth rates will take around three to four years to feed through into house prices.
Whilst, the report makes for optimistic reading for the property market, it will be met with dismay with anyone struggling to get on the property ladder, as prices continue to rise over most of the UK’s urban areas.
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