House prices in Edinburgh and Glasgow are currently rising faster than in other cities across the UK, according to latest UK Cities House Price Index produced by Hometrack.A second survey, from the property website Zoopla, also found that sellers in Scotland and northern England were less likely than others to have to reduce prices to complete a home sale.

South to north shift in house prices

The Hometrack index found that, over the past year, prices had risen by 7.9 per cent in Glasgow and 7.6 per cent in Edinburgh. The largest increases south of the border were in Leicester (7.5 per cent) and Birmingham (7.3 per cent).Richard Donnell, research and insight director at Hometrack, said, “Over the past 12 months there has been a dramatic south to north shift in the momentum of house price growth which has culminated in Glasgow registering the fastest rate of house price inflation in the UK.“In Glasgow, Edinburgh and many other large regional cities affordability is less of a barrier than in London and the South East, particularly for first-time buyers, and with mortgage rates remaining low this is helping to stimulate demand and increase activity in these markets.”However, one Scottish city – Aberdeen – had the distinction of being the only place where property price inflation stayed in negative territory. The UK’s ‘oil capital’, which has been in a slump since the collapse in the oil price, saw average prices fall 3.7 per cent.

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Average UK prices for 2017

Average city house prices across the country increased 6.3 per cent in the year to the end of November, although in some of the country’s most expensive cities, the rises were much more modest: 2.7 per cent in London, two per cent in Cambridge and only 0.7 per cent in Oxford.“As we move into 2018 increases in regional city house prices is likely to offset very low nominal growth in London,” said Mr Donnell. “There is 20-25 per cent of additional upside in house prices in regional cities with a simple adjustment on affordability metrics.“Add to this the impact of lower mortgage rates and the clouds of uncertainty around Brexit seeming set to lift in 2018 and we expect regional cities to continue above average house price growth next year and overall city house price growth to hit five per cent.”Meanwhile, the Zoopla analysis found that just over 35 per cent on the market last month had had their original asking prices reduced with typical discounts averaging more than £25,000.The analysis of property listings on the website found that most prices were discounted in Camberley, Surrey, where 53 per cent of homes recorded asking price reductions. Nearby Kingston-upon-Thames and Richmond-upon-Thames also saw prices reduced on more than half of the properties on the market. In London, the figure was 36 per cent.By comparison, only 15 per cent of Edinburgh sellers were offering a discount, 18 per cent in Salford, Greater Manchester, 21 per cent in Glasgow and 24 per cent in Manchester.

Positivity for first time buyers

Lawrence Hall, head of communications at Zoopla, said, “There has been an increase in the number of reduced properties currently on the market and a small rise in the average discount applied, which is more good news for first-time buyers trying to get on the property ladder.“A slight rise in levels of discounting is to be expected at this time of year when house-hunters are likely to be delaying their property search until activity picks up in January.”Areas with highest asking price discounts (reductions in percentage and cash terms, proportion of discounted homes on the market):

1. Camberley, 6.72%, £30,382, 53.52%
2. Kingston-upon-Thames, 7.78%, £84,244, 51.31%
3. Richmond-upon-Thames, 7.49%, £87,445, 50.52%
4. Watford, 5.66%, £29,668, 49.29%
5. Middlesbrough, 7.74%, £11,534, 48.24%
6. Mitcham, 7.13%, £43,441, 47.38%
7. Crawley, 5.23%, £20,998, 47.22%
8. Bracknell , 5.4%, £21,533, 46.8%
9. Uxbridge, 5.17%, £27,300, 46.51%
10. Preston, 7.27%, £11,677, 45.89%

Areas in with smallest asking price discounts:

1. Edinburgh, 4.9%, £15,122, 15.73%
2. Salford, 7.11%, £19,548, 18.64%
3. Glasgow, 5.94%, £9,097, 21.62%
4. Manchester, 6.2%, £15,391, 24.66%
5. Barrow-in-Furness, 6.02%, £8,339, 25.58%
6. Blyth, 7.32%, £10,257, 25.65%
7. Llanelli, 7.04%, £14,802, 25.82%
8. Cheltenham, 5.3%, £18,688, 25.96%
9. Birmingham, 5.81%, £14,057, 26.71%
10. Walton-on-Thames, 6.46%, £46,531, 27.04%

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Read more about the future of the UK economy in the Winter issue of our magazine 

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