Bristol and Manchester lead annual price growth
The latest Hometrack index has revealed that Bristol and Manchester led the way for price growth in key cities in the UK during 2016.
Bristol recorded growth of 9.6% and Manchester saw property values increase by 8.9%.
Highs
In Manchester, house price inflation hit a 12 year high, with demand far higher than supply. London however fell to seventh position.
Overall, average house price values rose by 2.2% in the final quarter of 2016, up by 0.3% from the previous quarter. Annual growth stood at 7.7%, slightly down on 2015.
The report suggests that lower unemployment and increasing earnings are continuing to increase demand in more affordable markets. Buyers are using to low mortgage rates to increase housings costs.
However, the headline growth rate is obscuring a shift in underlying growth at city level. Growth is shifting from London to regional cities, with more attractive affordability for further inflation.
Bristol and Manchester lead annual price growth
Capital Slowdown
It is predicted that house price growth in London will slow to 1% during 2017. Average prices increased by 7.3% during last year, the slowest annual growth rate since July 2013.
Other cities recording higher price growth than London, apart from Manchester and Bristol, were Oxford, Portsmouth and Southampton. These cities recorded growth of 8.1%, 8% and 7.9% respectively.
At the other end of the scale, Aberdeen saw annual price rates slide by -3.2%. However, house prices did recover by 2.9% in the final quarter of 2016. Despite this, Aberdeen has seen a 11% drop in average house prices since the year 2014.