House prices in all the UK’s cities finally recovered to their pre-financial crisis levels at the end of December, it has been revealed, helped by ‘bouncing back’ demand but weak supply, says Zoopla.
Its data reveals that the last city to attain its pre-2007 house prices was Newcastle. But this puts it over ten years behind property markets such as London, Oxford and Cambridge, where house prices recovered their pre-crisis peaks in 2010.
Zoopla says average annual house price inflation across all the UK’s cities is close to a three year high at 3.9%, created by a lack properties coming to market. And some cities are seeing extraordinary growth. Prices are surging by up to six percent in Edinburgh, Nottingham, Leicester, Birmingham, Liverpool, Manchester, Cardiff, Bristol and Leeds.
Zoopla has warned that in areas such as London and the South East where market conditions have been weak over recent years, would-be vendors may get over excited by estate agents talking about a ‘Boris bounce’ and “get ahead of themselves and become unrealistic on pricing”.
But Zoopla’s Research and Insights Director Richard Donnell (left) expects the imbalance between supply and demand to carry on supporting the current rate of house price growth until the summer.
“For example, strong demand and attractive affordability are sustaining above average price growth in Nottingham despite an increase in supply,” he says. “The same will apply to other cities including Liverpool and Manchester.”
He says the growth in supply in Oxford and Cambridge is more likely a result of sellers sitting on their hands waiting for market conditions to improve.