Latest figures have shown that Manchester’s property market had the second-highest rate of price growth in the UK during 2016, with the expectation that the northern city will move into pole position in 2017.
- The Manchester property market has registered its fastest rate of price growth for over a decade
- Experts predict that during 2017 the northern city will overtake Bristol to become the city with the highest price growth in the UK
- Strong market fundamentals, including a significant supply-demand imbalance, will continue to keep upward pressure on property prices
House price inflation in Manchester has hit a 12-year high, with demand far exceeding supply.
Manchester registered the second highest price growth among key cities in the UK, behind only Bristol, with a rise of 8.9% year-on-year.
Meanwhile, former investor favourite London has fallen to seventh place in terms of price growth, according to the data from the Hometrack index.
Underlying market conditions in the northern city remain strong. The supply of homes for sales is only just managing to keep pace with demand, which is keeping upward pressure on prices. It is forecast that Manchester could overtake Bristol in the first quarter of 2017.
Experts believe that investors will ‘naturally’ gravitate northward from London, with other regional cities such as Birmingham predicted to see above average price inflation during 2017.
Richard Donnell, Insight Director at Hometrack, said: “The impetus for house price growth is shifting to more affordable cities. Price rises are gaining momentum in cities where low mortgage rates are yet to be fully priced into housing.
“In Manchester the underlying market conditions remain strong, with the supply of homes for sale only just managing to keep pace with demand. This is keeping the upward pressure on house prices.”
The average year-on-year increase across the UK was 7.7%, with the average property price increasing by 2.2% in the fourth quarter of 2016, up from 0.3% in the previous quarter.