Index shows house price growth for key UK cities

Index shows house price growth for key UK cities [Photo: merron via iStock]

House prices are exhibiting strong growth in the UK's key cities, with prices in popular urban centres rising more than those in other areas.

This is according to the latest UK Cities House Price Index from Hometrack, which shows that prices in key cities have risen 8.5 per cent in the year to September 2016, compared to 5.7 per cent during the same period in 2015, and by 1.7 per cent in the third quarter.

What's more, the residential property market across UK cities is performing more robustly than the UK market overall, with nationwide residential property prices sitting at 7.2 per cent annual growth.

Highlighting that this data is supported by analysis of both property listings and sales data from the past three years, the report also shows that the rate of sales and the level of new property arriving on the market are almost matching. This creates an environment ripe for encouraging house price increases through scarcity of supply.

The report also reveals some areas performing more strongly than others. Some 11 cities have demonstrated higher growth since the beginning of the year, while nine have lower growth levels. 

However, all cities managed to achieve some degree of year-on-year growth, with the only exception being Aberdeen, where prices dropped by 9.5 per cent.

London, by contrast, experienced ten per cent growth, coming second only to Bristol with 12.3 per cent increases.

While London exhibited strong growth overall, this rate of ten per cent growth represents its lowest expansion rate since January 2015. The report suggests that this may be due to an increase in the supply of homes, which contrasts wider UK trends, therefore making growth somewhat slower than the capital's characteristically high price rise rates. 

Recent data from the Office for National Statistics also revealed that UK house prices are rising, recording an 8.4 per cent increase in the year to August 2016.