Figures for the third quarter of the year show Cambridge is the only city that has seen more growth than London since 2007, with an increase of 45% compared to 44% respectively.
The university city has also seen a year-on-year rise in property price of 11%, with an average house now costing £388,400. This makes it the most expensive centre outside Greater London, where the average home costs £448,000.
While Oxford is ranked third in growth over the past eight years, it saw the highest year-on-year house price increase at 13%, compared to 12% in London and 11% in Cambridge.
Richard Donnell (pictured), director of research at Hometrack, said: “While southern cities have been in recovery mode for over six years with price gains of up to 70%, the large regional cities have seen far more modest price rises over just the last three years.”
He said that improving customer confidence and low mortgage rates are boosting demand in cities where the recovery in house prices is in ‘its infancy’.
Donnell also added that many corporate investors and developers are looking to the major regional cities in search of better value to money investments relative to London.
| City | Average price | % Change year on year |
Relative to 2007 peak |
| London | £448,200 | 12,0% | 44.4% |
| Glasgow | £110,500 | 8.3% | -9.7% |
| Oxford | £378,800 | 12.8% | 37.4% |
| Bristol | £235,400 | 9.7% | 17.7% |
| Leicester | £149,100 | 6.3% | 3.8% |
| Bournemouth | £255,800 | 7.9% | 10.2% |
| Liverpool | £109,900 | 5.1% | -13.3% |
| Leeds | £146,900 | 7.0% | -3.7% |
| Manchester | £141,200 | 7.0% | -2.3% |
| Birmingham | £136,500 | 5.5% | -1.6% |
| Edinburgh | £194,900 | 6.7% | -2.6% |
| Nottingham | £131,300 | 5.3% | 1.9% |
| Southampton | £202,500 | 6.9% | 10.0% |
| Portsmouth | £201,300 | 6.4% | 10.8% |
| Cambridge | £388,400 | 10.7% | 44.7% |
| Cardiff | £178,700 | 3.6% | 2.6% |
| Sheffield | £124,400 | 5.4% | -2.6% |
| Belfast | £119,400 | 4.9% | -47.2% |
| Newcastle | £120,700 | 2.6% | -8.5% |
| Aberdeen | £193,500 | -0.8% | 13.3% |
Source: Hometrack UK Cities House Price Index
Despite seeing a 13.3% growth since 2007, Aberdeen was the only city with a year-on-year decline, with house prices falling by 0.8% to £193,000.
Belfast saw its largest drop since the recession, with a 47.2% drop in house prices. Buyers now need an average £119,400 to afford a property in the Northern Ireland capital.
Liverpool is the major city with the lowest average house price of £109,900, and despite a year-on-year increase of 5.1%, it is 13.3% down since its peak in 2007.
Donnell said further house price growth is likely to improve market confidence as it pushes down loan to values on mortgaged homes and allows households to access cheaper credit.
“The outlook for the next 12 to 18 months will be a balance between how much the high growth cities slow on affordability pressures and how much more momentum will come from cities where the pick-up in house prices is just picking up,” he said.
