Major UK Cities Experiencing Strong House Price Growth

The major cities of the UK have experienced exceptionally strong growth in residential property prices over the first quarter of this year. Across the 20 biggest cities in the country, a new report from Hometrack said, house prices grew at the fastest rate seen for twelve years.

Growth across the initial three months of 2016 was 4.2% on average across the 20 biggest UK cities, Hometrack’s price index says. This is the fastest quarterly growth rate since the first quarter of 2004. The annual growth figure across the major cities hit 10.8%. This is noticeably stronger than the UK-wide average, which was just 8.7% year-on-year. These increases brought the average price of a property in one of the 20 biggest cities to £235,000.

Liverpool and London topped the list when it came to quarterly gains. In the first three months of the year, both of this cities saw the average property increase in price by 4.1%. There is, however, considerable value disparity between the two cities – as indeed there is between London and the rest of the UK. The average residential property in London is valued at £468,100 after first-quarter growth, while in Liverpool the average homes costs a rather more affordable £113,100.

Furthermore, despite these strong gains, Liverpool’s house prices remain down by 11% compared to their pre-crisis peak. Many are taking this as a sign that Liverpool’s prices have plenty of room for growth left, particularly investors who are taking this as a sign that there is a lot of potential for capital appreciation when investing in the city.

Behind London and Liverpool, the next biggest quarterly figure belongs to Cardiff. Quarterly price appreciation in Wales’ premier city was 3.5%. Southampton and Bristol follow close behind, with properties in each of these cities growing by 3.3% across the first quarter of 2016.

Taking an annual perspective, the city with the fastest-growing house prices was Cambridge. The famed university city saw year-on-year growth of 15.6%. Second place belongs to London, with 14.2%, and third on the list is Bristol, where the average property grew in value by 13.5% compared to the same period in 2015.

A number of factors helped push forward house prices in the UK’s major cities across the first quarter of the year. One example is the increase in stamp duty, introduced in April. More specifically, the desire of investors and second home buyers to push transactions through before this increase took effect led to an increase in completions in the early part of 2016, with both agents and mortgage brokers reporting a rush on purchases as a result.

Hometrack predicts that house price growth will continue. However, they do predict that the rate of growth will slow somewhat, especially in higher-value properties. In the immediate future, a slowdown is likely to be caused by the end of the rush to beat stamp duty increases and, especially, uncertainty surrounding the impact of the EU referendum on the property market.

Mark Burns

Mark Burns is a Director and Property Investment Consultant at Hopwood House. With over 10 years' experience in property investment, Mark has provided investors with a wide range of opportunities in exotic locations around the world.

You May Also Enjoy

small house bird box
Breaking News

UK First Time Buyers better off than many other global nations

Is it really that bad being a first-time buyer? UK better off than many other global nations when it comes to affordability The latest market analysis from Yopa, the full-service estate agents, reveals that first-time buyers (FTBs) in the UK may be paying 63% more to get a foot on the property ladder than they…
Read More
new build homes colchester essex
Breaking News

Building Safety Regulator Reform

The Government has announced reforms to the Building Safety Regulator, including leadership, process and investment. The changes are hoped to deliver 1.5 million homes. The reforms pave the way for creation of a single construction safety regulator, as recommended by the Grenfell Tower enquiry. David Smith, property litigation partner at London law firm Spector Constant…
Read More
Breaking News

New anti-money laundering rules now in effect: what landlords need to know

New anti-money laundering (AML) rules came into effect this month, marking a significant change for landlords and the lettings industry as a whole. The new rules mean financial sanctions checks are now required for all lettings, regardless of how much rent is charged. Here, Steve Bond, managing director of residential lettings for Beresfords, explains what…
Read More
Breaking News

What landlords need to know about the upcoming Renters Rights Bill

The government’s long-awaited Renters Rights Bill is one of the most significant overhauls of the private rental sector in decades. While it has not yet received royal assent, the legislation is expected to come into effect late this year, or early in 2026. With the bill moving closer to becoming law, Steven Bond, managing director…
Read More
Breaking News

Mortgage approvals bounce back in May

The latest figures show that: – Mortgage approvals on house purchases for May sat at 63,032 up 3.9% from 60,656 in April. The monthly increase seen in May marks the end of four months of previous decline, with approval levels having fallen each month since January of this year. Approvals are also 2.5% higher than…
Read More
Breaking News

Money and Credit – May 2025

Key points: Net borrowing of mortgage debt by individuals increased by £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April. Net mortgage approvals for house purchases increased by 2,400 to 63,000 in May. Approvals for remortgaging also increased by 6,200 to 41,500…
Read More