Residential property prices are recovering across the regions, with price growth now extending out beyond London and the South East, according to the latest figures from the Nationwide, Halifax and Land Registry house price indices. These all show positive trends for a strong majority of the regions, but a more detailed analysis of key local markets shows that some cities are significantly outperforming others.

Manchester and Cardiff are two city markets showing particularly strong improvement, with Land Registry figures (Jan 14) showing year-on-year price growth of 3.6 and 5.6% respectively.

Evidence from local surveyors in the RICS Residential Market Survey (Feb 2014) suggests that these rises are in part due to a lack of supply, with new instructions remaining at low levels.

The Land Registry transaction level data lends some further evidence to this theory, with the number of transactions still only a fraction of their pre-financial crisis peaks, down over 50% in Manchester and almost 30% in Cardiff.

Areas exhibiting lower growth include Glasgow and Leeds, with annual price changes of 0.0% and -0.5% respectively, according to the most recent Land Registry and Registers of Scotland data. Some of last year’s quarterly figures showed strong growth in both locations though, so it is perhaps the case that the recovery in prices is simply arriving later in these areas.

When combined with strong demand from first-time buyers and increasing mortgage availability, the lack of supply across the regional markets means that prices are predicted to continue rising through 2014.

Unlike London and some of the prime South East locations, prices are still significantly below their previous peak in much of the rest of the country, so there is perhaps better value to be found in certain regions – our five-year forecasts suggest that both the South West and the East of England will outperform London significantly.

Taken from
Spotlight: Regional Office Market Report - April 2014