Across the UK house prices rose by 6% on average this year.
But some locations are outpacing the national average, according to our latest House Price Index.
House prices in Liverpool have gone up 9.4% over the past year, the largest increase in all UK cities, adding £11,731 to the cost of the average home.
Despite the steep increase, average property prices in Liverpool are still nearly £100,000 below the UK average of £234,000, at at just £136,721.
Manchester and Belfast, where average properties cost £193,900 and £150,800, have seen increases of 7.7% and 7.5% respectively.
Other strong performers with gains of 7% or more are Sheffield, with average house prices of £152,600, and Nottingham (£175,000).
In fact, all of the 8 cities where growth outpaced the 6% seen nationally, had property prices well below the UK average.
At the other end of the scale, growth has been slowest in London, where a typical home costs £492,300, with property values edging ahead by just 2.5%.
City | Price increase |
---|---|
Liverpool | 9.4% |
Manchester | 7.7% |
Belfast | 7.5% |
Sheffield | 7.4% |
Nottingham | 7% |
Leicester | 6% |
Leeds | 6.3% |
What’s happening with house prices regionally?
A similar pattern can be seen regionally, with growth well above the UK average of 6% in the north-east, south-west and West Midlands this year.
Wales has seen the strongest price gains across the whole region during the past year, with typical property values rising by 9.4%.
It is closely followed by Northern Ireland which has seen rises of 9%, while the North West takes third place with property values increasing by 7.9%
The East Midlands, and Yorkshire and Humber, complete the top five with gains of 7.5% and 6.9% respectively.
Why are house prices going up?
The pandemic-induced search for space, combined with the stamp duty holiday, has driven strong house price growth during the past year.
But affordability is becoming increasingly stretched in markets that already had high house prices, such as London and the south-east.
With mortgage lenders employing tough affordability criteria, these constraints are starting to act as a brake on the market.
By contrast, in regions where house prices are below the national average, there is still plenty of room for growth.
What will price rises mean for me?
There is currently a mismatch between supply and demand in the property market.
Buyer numbers increased by 20.5% but the supply of properties for sale fell by 26.4%, according to our latest research.
As a result, if you are in one of the areas that have seen strong price growth and you want to cash in the gains you have made, you are likely to be in a strong position.
Use My Home to get an estimate of how much your property is likely to be worth.
Going forward, house price growth across the UK as a whole is expected to slow to between 4% and 5%.
The expected slow down is due to a combination of the shortage of homes for sale and the end of the stamp duty holiday.
Areas where property remains most affordable are likely to continue to outperform the rest of the market.