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Which city has the highest house price inflation? It’s not London

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
28/06/2016

London is no longer the city with the highest house price inflation, for the first time in six years.

Bristol has become the first city outside the South East to see annual house price inflation outpace London in more than six years, according to the latest Hometrack UK Cities House Price Index.

The city saw average property prices rise by 14.1% over the last year, compared to 13.8% in London, marking a trend whereby large regional cities have registered the highest quarterly growth rates.

In the last three months Liverpool (5.4%), Bristol (4.2%), Manchester (3.9%) and Leeds (3.7%) have seen the greatest quarterly growth, boosted by a growing economy and the strong demand from landlords ahead of the Stamp Duty deadline on 1 April 2016.

Capital slowdown

London was one of eight cities to experience slower year-on-year growth, from 14.2% in April to 13.8% in May, and Hometrack said this is likely to intensify in the wake of last week’s EU Referendum result.

Richard Donnell, insight director at the firm, said: “House price inflation in major cities outside of London and the South East, such as Bristol and Liverpool has been accelerating but it is now expected to slow towards low single digits in the coming months as demand cools on the back of the EU referendum result. At present we expect housing market turnover to bear the brunt of increased uncertainty rather than house prices.

“Standing back from the immediate turmoil in financial markets, the reality is that the fundamentals of the housing market remain unchanged with record low mortgage rates and a wide imbalance between supply and demand. The UK doesn’t have a problem with housing demand, the more important question is how many buyers and sellers feel confident to participate in the market in the near term.”

Below is a table showing the top cities with the highest property inflation:

YMoney.HousepriceinflationTable (002)