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City House Prices at Record High
House prices in cities across the UK are, on average, 7% higher than their county average, according to the most recent figures from Halifax.
The house prices in British cities increased by 65% over the past 10 years. In August 2001 an average property in UK was priced at £104,681 compared to £172,917 in August 201. This is equivalent to a weekly increase of £131. House prices across the UK as a whole increased by 56% over the same period.
Inverness, awarded city status in 2000 to mark the new millennium, recorded the highest rise in house prices over the decade (148%), followed by Truro (121%) and Hull (119%). Nine of the 10 cities with the strongest house price growth are outside southern England.
The majority (56%) of UK cities have a higher average house price than their county average with seven of the 10 cities with the highest prices are in the south. Winchester has the largest premium with houses trading at 77% above the average house price in Hampshire. Westminster has the next highest premium with prices 74% above the Greater London average. Lichfield in Staffordshire has the highest premium (58%) outside southern England.
There are some notable exceptions to this with the three cities that are most affordable relative to their county average also located in southern England (Portsmouth, Gloucester and Plymouth). The city with the biggest discount to its county average is Portsmouth, where the average house price of £141,871 is 31% (£63,344) below the Hampshire average.
However, despite a decline in affordability levels in cities - a city home is currently 5.2 times the average gross annual earnings, compared to 4.8 in 2001 - there has been an improvement from its peak of 7.4 in 2007.
Suren Thiru, housing economist at Halifax, said:”With the housing demand and supply imbalance that characterises the UK property market often more acute within our major urban conurbations, homes in cities across the country are typically trading at a marked premium over neighbouring areas. City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas, as well as by the pressures on the housing supply that often typify such locations.”
