After twelve years, property prices in all British cities will exceed the 2007 level for the first time before the financial crisis.
British property prices hit new highs
Great Britain’s property prices in January 2020 all exceeded the pre-global economic price level for the first time. This shows the Zoopla City House Price Index from January 2020. In addition, the annual house price growth rate was 3.9 percent in January at a 33-month high, according to Zoopla. However, the UK property market is struggling with house price inflation.
After twelve years, all UK cities outperform real estate prices in 2007
In the meantime, all cities in the UK have managed to exceed the 2007 property price level. While London was the first British city to have its property prices fully recovered after the financial crisis in just two and a half years, southern cities in England such as Oxford or Cambridge required 3.7 and 3.9 years, respectively. However, these two cities also recovered relatively quickly in terms of property prices. According to the Zoopla index, Newcastle only reached the 2007 price level again in December 2019.
The London real estate market in particular has benefited from international buyers and the depreciation of the pound in recent years. The average purchase price there is now £ 481,800, 59 percent more than in 2007. Oxfords and Cambridge’s house prices, too, averaging £ 423,900 and £ 415,300, are more than 50 percent higher than the 2007 peak.
Real estate prices in these cities are growing the slowest and fastest
Rising property prices are due to the imbalance between supply and demand on the UK housing market, said Richard Donnell, Head of Research and Insight at Zoopla. The property portfolio across the country rose by just 2.6 percent, while demand increased by 26 percent. This imbalance in the market should dominate the British real estate market at least until mid-2020, reports Donnell.
According to the Zoopla index, house prices rose the most in Edinburgh, Nottingham and Leicester. In Edinburgh, house prices rose 5.9 percent last calendar year, 5.4 percent in Nottingham, and 5.3 percent in Leicester. However, less housing is for sale in both Edinburgh and Leicester than it was a year ago.
The slowest house prices rose in Oxford and Southampton, in Aberdeen prices even fell by 4.3 percent on average.
House price inflation on the UK real estate market
All British cities have had house price inflation of at least 2 percent again for the first time since early 2017, only Aberdeen has a lower rate.
Richard Donnell predicts the future of real estate price increases: “We do not expect the growth rate to accelerate significantly in the foreseeable future, as pressure on purchasing power will limit price increases, especially in the south of England”.
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