Edinburgh and Glasgow among UK cities pushing up house prices as people return to office
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Since the start of the year, as people have gradually returned to the office, property prices across Britain’s cities have typically grown by 9.2 per cent, compared with 7.9 per cent growth on average in surrounding areas, according to the data from lender Halifax.
Edinburgh saw average prices jump to £276,831 in September, up 12.9 per cent since January, while areas surrounding the capital saw a 6.1 per cent jump. In Glasgow, the average winning bid for properties was £173,331, up 8.5 per cent, and compared to a 4.6 per cent increase seen in the suburbs of Scotland’s largest city. In England, Sheffield saw the biggest jump in prices for city-centre properties, leaping 18.9 per cent to reach £228,353, while London was up 6.8 per cent to £612,582.
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Hide AdAndrew Asaam, mortgages director at Halifax, said a trend of people seeking to live in greener spaces, which was seen early on in the coronavirus pandemic, had remained. “That trend didn’t disappear completely this year, as house price growth in these areas remained strong,” he added. “But, as daily life started to get back to normal for many, the opportunity to live in cities became more attractive again, driving up demand.
“There’s evidence of this in locations across the country, with property-price inflation in the majority of cities outstripping increases in their surrounding areas. Clearly, the economic environment has changed considerably in the last few months, with the likelihood of more significant downward pressure on house prices, as the cost-of-living squeeze and higher borrowing costs limit demand. The extent to which such trends will continue to shape the housing market is therefore uncertain.”
Halifax noted that some places bucked the trend, for example the Birmingham suburbs saw house prices rise faster in percentage terms than in the city itself, reflected in places like Walsall, which has seen property price inflation of 16.4 per cent this year so far. The lender added that in the North East of England, Newcastle, Sunderland and Middlesbrough have recorded weaker house price growth this year so far than their surrounding areas. Homes on the outskirts of Sunderland enjoyed the biggest percentage rise of all comparable areas surveyed, at 10.9 per cent.
Against a backdrop of concerns over strained household budgets, a survey published last month found that one in five households across Scotland reported being in serious financial difficulty. The report, commissioned by the Abrdn Financial Fairness Trust, and analysed by a team at the University of Bristol, found that 21 per cent of Scottish households – equating to approximately 540,000 – said they were facing serious financial hardship, worse than at any point since the beginning of the pandemic, with 22 per cent warning that they faced a constant struggle to pay bills, compared with just 15 per cent of households in England.
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Hide AdAdditionally, housebuilding giant Barratt Developments earlier this month said its outlook for the year was “less certain”, with one analyst stating that the trading update “may well be the canary in the coalmine for the housing market”.
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