HOMES in the country’s 20 largest cities - including Leeds and Sheffield - have seen their values increase by at least five per cent annually for the first time in over a decade.
Property analyst Hometrack said that growth in house prices over the last year has ranged from a 17.3 per cent increase in London to 7.3 per cent rise in Leeds and 5.7 per cent in Sheffield.
This marks the first time since November 2004 that all 20 cities have registered year-on-year house price increases of more than five per cent.
The news was tempered by figures which showed a 10 per cent fall in the number of house builds started in England between July and September compared with the previous three months.
A total of 116,930 house builds were completed in the 12 months to September, an eight per cent year-on-year increase, although charity Shelter said it was still less than half of the 250,000 new homes a year needed to address England’s housing problems.
The Hometrack report said that by the end of the year, prices in some cities outside the South East could be rising at a faster month-on-month rate than those in London.
On average, prices increased by 9.2 per cent over the last year to reach £185,700.
Despite the increases, Hometrack said that there is also “clear evidence” that the upward pressure on house prices is starting to ease amid weakening demand.
Hometrack said the majority of cities are now starting to show signs of a cool down in the underlying pace of house price growth.
Richard Donnell, of Hometrack, said: “This latest analysis shows that momentum in house price increases is starting to slow, with less pent-up demand for housing than two years ago.”
He expects the rate of house price growth to slow further as the year comes to an end.
“For the first time since the financial crisis, an improved economic outlook has seen house prices in cities outside the south of England rising off a low base.”
Property consultant JLL is predicting house prices in Yorkshire to rise by 3.5 per cent next year.
JLL’s head of residential in Leeds, Guy Ackernley, said: “Yorkshire, like much of the rest of the UK, has seen resurgence in demand and prices. Leeds in particular has been one of the country’s star performers and it will continue to do well.
“But we face a situation where a lack of supply is pushing up prices to a level where affordability and the ability to raise a deposit are once again becoming an issue, despite the valiant efforts of initiatives like Help to Buy.”
Patrick McCutcheon, of Dacre, Son and Hartley, said the ‘golden triangle’ of Harrogate, York and North Leeds has had a strong first time buyer and middle-market this year.
“House buyers have been much more enthusiastic this year. There was a noticeable upturn in tenants moving out from rental property and back in to the sales market as soon as reports of house price inflation began in the new year.”
Ben Jacobs, of Stoneacre Properties in Leeds, said: “I believe the values in certain areas of Leeds will continue to increase as the demand continues to rise...however this is dependent on the willingness of banks to provide mortgages to first time buyers.”