House price growth across UK cities has hit a two year high of 3.9%, according to Zoopla’s latest Cities House Price Index.
The increase in house price inflation follows “flat to falling” house prices towards the end of 2018, and has also been “bolstered” by a surge in buyer demand.
Buyer demand in the first weeks of the new year (23 December 2019 to 19 January 2020) was 26% higher than the same four-week period in 2018 and 2019. Every UK city recorded an increase in demand from buyers over this time, excluding Belfast.
Cities in the Midlands and north of England recorded the “strongest interest” from buyers in 2020 so far, with Sheffield, Leeds and Leicester recording an “above average” increase of 20% in buyer interest.
According to Zoopla’s research, Nottingham, where house price inflation is currently 5.2%, has the “strongest prospect for house price growth” this year. Edinburgh and Glasgow ranked second and third, respectively.
That property platform said that cities in the south of England, including Southampton, Oxford and London are expected to see house price growth “underperform the average” this year. This is largely due to “affordability constraints” in these areas following strong house price growth between 2010 and 2016.
Zoopla’s findings stand in contrast with Nationwide’s latest House Price Index, which states that price growth increased to 1.9% in January, up from 1.4% in December. This figure comes from research across the nation, however, whilst Zoopla analysed UK cities alone in their latest price index update.
Richard Donnell, research and insight director at Zoopla, said: “Whilst the first few weeks of the year always see a return of home buyers to the housing market, demand for housing at the start of 2020 is 26% higher than over the last two years.
“This is partially due to fading political uncertainty; households who were holding off moving are now starting to return to the market and this momentum has been supported by low mortgage rates.”
He added: “The cities with more affordable house prices, such as Sheffield and Leeds, have seen the greatest increase in buyer demand as house hunters continue to focus on value for money this year.”
“Regional cities continue to lead the way for house price inflation this year thanks to continued economic growth and more attractive affordability of housing. The best prospects for house price growth in 2020 are in Nottingham, Edinburgh, Glasgow and Manchester.”