UK cities set for 10% year-on-year house price growth in 2015

UK cities set for 10% year-on-year house price growth in 2015

The UK property market could record double-digit growth for the year 2015, if current trends continue.

Double-digit growth is a sign of a thriving market where confidence is strong and is usually backed up by strong demand. 

According to the latest Hometrack UK Cities House Price Index, the city house price inflation in the UK is on track for ten per cent growth this year, with property prices continuing to accelerate.

It said by the turn of the year, city prices will have seen double-digit growth thanks to the current average 9.4 per cent increase year on year across the UK.

Hometrack said much of this growth is coming from the fact that many UK cities are returning from a low base, meaning they were previously seeing little to no growth, but are now starting to gather pace, helping bring the average up. 

These cities include the likes of Glasgow, Manchester and Liverpool, where prices in the last 12 months have climbed by 8.3 per cent, seven per cent and 5.1 per cent respectively. These three cities are now enjoying their fastest annual rises since the previous peak in 2007, which is helping bring strength to the property sector as a whole. 

Richard Donnell, Director of Research at Hometrack, said growth across the cities as a whole has been brought about by the appetite to buy, which has been encouraged by improving financial conditions as a whole. 

"Improving consumer confidence and low mortgage rates are boosting demand in cities where the recovery in house prices is in its infancy. While southern cities have been in recovery mode for over six years with price gains of up to 70 per cent, the large regional cities have seen far more modest price rises over just the last three years," he said. 

"Further house price growth is likely to improve market confidence as it pushes down loan to values on mortgaged homes and creates capacity for households to access cheaper credit. 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," he added, saying that the ten per cent growth predicted for this year may just be the start of what's to come.