House price growth in cities “outpaces” increases in surrounding areas

Cities drove home price growth this year, leaving suburbs behind, according to research.

Since the beginning of the year, as people have gradually moved back to the office, property prices in British cities have generally risen by 9.2%, compared to the average growth of 7.9% in surrounding areas, Halifax said.

Andrew Asaam, Halifax’s director of mortgages, said the trend of people seeking greener spaces to move to, which was seen at the start of the coronavirus pandemic, has remained.

He said: “This trend has not completely disappeared this year, as the growth in house prices in these areas has remained strong.

“But as daily life began to return to normal for many, the opportunity to live in cities became more attractive again, increasing demand.

“There is evidence of this in locations across the country, with property price inflation in most cities outpacing increases in surrounding areas.

“Clearly the economic environment has changed considerably in recent months, with the likelihood of more significant downward pressure on house prices as the cost of living squeeze and rising financing costs constrain demand.

“The extent to which these trends will continue to shape the housing market is therefore uncertain.”

Newcastle is among cities bucking the general trend, with house prices rising fastest in surrounding areas this year (Owen Humphreys / PA)

But some places are bucking the trend. In the surrounding areas of Birmingham, house prices have risen faster in percentage terms than in the city itself. This is reflected in places like Walsall, which has seen property price inflation of 16.4% this year so far, according to Halifax.

And in the north-east of England, Newcastle, Sunderland and Middlesbrough have experienced weaker house price growth this year than their surrounding areas.

Here are the average house prices in January 2022, followed by September 2022, the percentage increase and the average growth in surrounding areas (the areas of local government that directly surround cities), according to Halifax:

– Birmingham, £ 205.712, £ 223.362, 8.6%, 9.4%

– Bristol, £ 293,330, £ 320,067, 9.1%, 9.0%

– Cardiff, £ 235,084, £ 250,566, 6.6%, 7.0%

– Derby, £ 180,265, £ 202,994, 12.6%, 10.7%

– Edinburgh, £ 245.107, £ 276.831, 12.9%, 6.1%

– Exeter, £ 263,827, £ 294,183, 11.5%, 7.6%

– Glasgow, £ 159,770, £ 173,331, 8.5%, 4.6%

– Leeds, £ 199,728, £ 226,923, 13.6%, 9.8%

– Leicester, £ 206,170, £ 227,251, 10.2%, 9.1%

– Liverpool, £ 158,599, £ 172,636, 8.9%, 7.2%

– Manchester, £ 205,254, £ 228,806, 11.5%, 6.6%

– Middlesbrough, £ 146,612, £ 143,369, minus 2.2%, 7.8%

– Newcastle, £ 171,151, £ 182,163, 6.4%, 9.3%

– Norwich, £ 209,662, £ 224,025, 6.9%, 2.5%

– Nottingham, £ 183,866, £ 199,467, 8.5%, 9.1%

– Portsmouth, £ 225,696, £ 242,945, 7.6%, 10.4%

– Plymouth, £ 187,200, £ 192,623, 2.9%, 7.0%

– Sheffield, £ 192,090, £ 228,353, 18.9%, 9.7%

– Southampton, £ 207,000, £ 240,459, 16.2%, 7.0%

– Sunderland, £ 131,158, £ 138,088, 5.3%, 10.9%

– London (inner London versus outer London districts were used for comparison), £ 573,559, £ 612,582, 6.8%, 4.6%.

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