House prices in UK cities increased by 11.4%

Woman and child look at properties advertised for sale in an Estate Agents window, London, UK.Photo:Jeff GilbertHouse prices in UK cities increased by 11.4% in December, which is a 15 month high due to strong market activity, according to the latest index report. Demand is increasing despite of short supply. Cambridge saw the highest annual rate of growth at 14.4% followed by London at 13.8% and then Bristol at 12.8%. Overall the movement for growth continues to come from regional cities where prices are rising as the homeowners confidence improves and utilizing record low mortgage rates to access the market.

Richard Donnell, director of research at Hometrack says: “Demand for buying property as an investment is increasing; the reality is that those buying a property to live in still account for around eight in every 10 sales. There is likely a positive prediction that there will be some net selling by few investors in 2016, this will bring new supply to the market, especially for smaller sized homes, but insufficient to materially change the balance of supply and demand. The current chaos in financial markets is likely to further weigh on demand and activity in central London more than other cities in the near term.”

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