The best growth in property prices in UK cities have shown Cambridge, London and Bristol

House prices in key UK cities increased by 11.4% in December 2015, reaching a 15-month high due to a year-round market activity. Cambridge, London and Bristol were the leaders in price increases, although the total volume of transactions in 2015 was lower than in 2014, a driver of growth in prices outside of these cities continue to be the regional cities such as Liverpool and Glasgow.

The increased demand for residential property across the UK is faced with a lack of properties for sale. In addition, the demand is fueled by interest from investors rushing to buy property before the increase in Stamp duty. The highest rate of price growth in 2015, recorded in Cambridge – at the level of 14.4%, followed by London with prices rising 13.8% and then Bristol, where price growth in 2015 amounted to 12.8%.

Traditional Hometrack report noted that although prices of residential real estate and continue to grow, the number of transactions declines, as the market is limited by the shortage of housing for sale.

The fall in oil prices has an impact on the property market in Scotland., especially Aberdeen. Falling prices in Aberdeen in 2015 is 1.4% and it seems that this trend will continue in 2016. Newcstle and Sheffield showed a rather weak price growth rate of 3.7%, however , it is still more than the growth of wages in these regions.

The property market of Liverpool and Glasgow have demonstrated improvement over the last year. If just a year ago, the growth of prices for housing in Glasgow was only 0.1%, then in 2015, real estate in Glasgow has risen by 8.5%. Similarly, the property of Liverpool has risen by 5.7% compared to growth of 1.3% a year earlier.

Introduction trepresents increased stamp duty for investors in April 2016, of course, will spur investment activity until April, and will be reduced after the introduction of the tax. But the reality of the UK property market is such that eight potential homebuyers to buy it for themselves, and the government hopes that the reduction in demand from investors will reduce the pressure on the market and the market will be more affordable housing for those who first buys a house. However, it is unlikely these changes will greatly affect the balance of supply and demand.

Forecast from Hometrack for 2016 – moderate growth of housing prices , especially in regional cities in the UK and reducing the pressure of consumer demand for luxury properties in the UK on the back of increased rates of stamp duty and the global crisis on world financial markets.

® Alice Morgan. G. 11.01.2016

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