30 Jun

South drives property market

South drives property market

Cities in the South of England are playing a major role increasing UK property prices, according to new data.

The latest index from the property analyst Hometrack showed UK house prices have risen by £11,500 over the past year.

This means the average house in the UK now costs £189,400, although the average property in the capital stands at £425,700.

Oxford recorded the greatest increase in prices over the year to May with an average £41,700 surge. While elsewhere saw London values rise by £38,900, Cambridge by £23,900, Bristol by £22,400, Southampton by £15,300, Bournemouth by £15,300 and Portsmouth by £15,000.

However, the situation was less positive in the North of the UK, with smaller than average increases recorded in Liverpool, Newcastle and Sheffield, while there was a 0.4 per cent fall in prices in Aberdeen.

Richard Donnell, director of research at Hometrack, predicted that affordability could prove a major problem for many areas of the UK.

"The double digit price growth registered in cities such as London, Oxford and Cambridge is being sustained by a lack of supply and below average transaction volumes with a third of sales funded by cash or buy-to-let mortgages," explained Mr Donnell.

He added: "London has the highest price to earnings ratio, but it covers a wide range of sub-markets. Over the last three years, the impetus for house price growth has shifted from prime markets to the more affordable markets in outer London and the commuter belt."ADNFCR-1222-ID-801792807-ADNFCR

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