The latest UK Cities House Price Index House from Hometrack has found that prices in a quarter of the UK’s largest cities are struggling to recover to the level they were at during the height of the financial crisis.
Prices in Belfast, Liverpool and Aberdeen are still lower than they were in July 2008, less than two months before the height of the crisis, the collapse of investment bank Lehman Brothers in September 2008. Meanwhile Newcastle and Edinburgh have experienced weak single digit growth.
At £129,629, prices in Belfast are 28% lower than they were a decade ago, highlighting how hard Northern Ireland’s capital was affected.
Aberdeen and Liverpool are also still recovering, with prices down 3% and 1%, respectively, on where they were a decade ago.
House prices are just 1% higher than they were a decade ago in Glasgow (£121,940) and 3% in Newcastle (£128,641), an indication of how slow their recovery has been.
By contrast, homeowners in Cambridge have seen the value of their properties rocket by 70%, on average, to £432,410.
London home owners have experienced nearly as spectacular a rise, with prices up 65% to an average of £483,792 since July 2008.
On a national basis, house prices are 26% above the level they were ten years ago, highlighting the regional differences within the UK’s housing market.
In the past year, UK house prices have risen by 4.2%, driven by medium-sized cities such as Nottingham and Leicester, where house prices are rising by 7.5% and 6.6%, respectively.
Richard Donnell, insight director at Hometrack, said: “The fact house prices in some of our biggest cities are still recovering from the financial crisis shows how big an impact it had on the UK’s regional housing markets.
“While 2008 was the year when house prices fell at their fastest rate, they continued to fall for a further three to four years in the weaker performing markets as the impact of the recession and restricted credit availability hit the value of people’s homes.
“These past 10 years would have been difficult for many homeowners living in these cities, with low prices, weak growth making it difficult to move homes for work or to up-size to accommodate growing families.
“At the other end of the spectrum prices in Cambridge are 70% higher over the last decade followed by London (65%), Oxford (55%) and Bristol (53%). Stronger economic growth, a broader base of demand for housing and limited availability of homes for sale are behind this stronger performance. However, these cities are now registering the weakest annual rate of growth as tax changes impacting investor and affordability pressures impact demand and the level of house price growth.”