Buyer interest in homes for sale across the UK’s biggest cities jumped by more than a quarter at the start of the year, new research shows.
Although the start of the year is traditionally a time when buyers return to the market after the Christmas lull, demand in the first weeks of 2020 was up by a strong average 26 per cent compared to the same period in both 2019 and 2018, according to Zoopla.
Both those years featured relatively slow starts to the year for the property market, but analysts say that there has been a pick-up that pre-dated the election.
However, some cities have seen a greater rise in demand than others and it is the North and Midlands leading the way, while London and the South are more subdued.
The graph shows that cities like Sheffield, Leeds and Leicester saw above-the-average rise in demand for homes
Alongside the figures came growth rankings for the major cities, with Zoopla suggesting Nottingham, Edinburgh and Glasgow would see the highest inflation in 2020.
In contrast, London was ranked 16th, Cambridge 12th and Oxford 19th, indicating the capital, commuter belt and major southern cities will continue to be a buyer’s market.
Demand had already picked up in December and translated into higher sales – with HM Revenue figures showing an 11 per cent increase in transactions compared to December 2018.
The average selling price across the UK’s biggest cities rose 3.9 per cent to £257,600 in the year to December, the highest level of annual inflation seen since September 2017, said Zoopla, the property website that conducted the research.
Cities in the North and Midlands like Sheffield, Leeds and Leicester, where house prices are more affordable, saw the biggest jump in buyers’ interest, with demand up to 20 per cent higher than the average 26 per cent increase.
Demand was also above the average in Birmingham, Manchester and Liverpool and generally all of the UK’s biggest cities except for Belfast saw an increase in interest from buyers.
Richard Donnell, of Zoopla, said the increase in interest was down to a mix of more political certainty and low mortgage rates.
‘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 per cent higher than over the last two years,’ he said.
‘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.’
Cities in the North and Midlands were also those to see some of the biggest annual price rises in the country, with Nottingham seeing a 5.2 per cent increase, Leicester 4.7 per cent and Manchester 4.5 per cent.
However, it was Edinburgh to see the fastest house price growth across 2019, with annual price growth at 6.1 per cent.
And while the divide between Northern and Southern cities remains, with the North seeing stronger price growth than the South, Zoopla said there were signs of a narrowing in recent months.
Sheffield saw the biggest increase in buyers’ demand at the start of the year
Which cities will see the fastest growth this year?
The report also predicts which cities will see the fastest price growth this year, using a range of metrics, from house affordability to discounts to asking price and time to sell.
Nottingham, where price inflation is currently at 5.2 per cent, is seen as the city where prices will increase the most this year.
Edinburgh and Glasgow are ranked second and third respectively.
Nottingham, where price inflation is currently at 5.2%, is seen as the city where prices will increase the most this year
House prices are currently sitting at an average of £242,200 in the Scottish capital and the rate of price growth in the 12 months to December 2019 was recorded at an impressive 6.1 per cent here.
Cities in the south of England, such as Southampton, Oxford and London are expected to see below-average price growth this year mostly due to affordability constraints.
London came in 16th place, but sales volumes are expected to rise faster than prices as buyer confidence improves, boosting sales rather than price levels.
‘Regional cities continue to lead the way for house price inflation this year thanks to continued economic growth and more attractive affordability of housing,’ Donnell said.
‘Overall, we are expecting house prices to grow on average by +3% across all UK Cities in 2020.’
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