Demand for housing leads to property price jump

The report said house prices across the country’s major cities lifted 4.3 per cent in the three months to July, the highest quarterly growth since 2004.

It also adds that there is scope for further inflation as nine of the 20 cities the survey monitors still have average prices that are lower than their 2007 peak.

The analyst monitors 20 UK cities, including Leeds and Sheffield in Yorkshire.

Prices in both cities fall below the average of those monitored, with prices growing 2.3 per cent in Leeds in the last three months, and 2.4 per cent in Sheffield - compared with the 20 city average of 4.3 per cent.

When examining the year-on-year data, the Yorkshire cities fall even further behind the national growth average, with Leeds at 4.9 per cent and Sheffield at 4.2 per cent - compared to 8.5 per cent for the 20 cities’ average.

Since the house price high of 2007, prices in Leeds have fallen by 5.8 per cent and in Sheffield by 3.2 per cent. Across the 20 cities analysed by Hometrack, house prices are now up 18.6 per cent on 2007.

The report said a combination of low mortgage rates, economic growth and rising earnings continue to stimulate demand and put upward pressure on house prices. But it adds that in all of the 20 cities it surveys, except Aberdeen, house price growth is greater than the current 2.4 per cent increase in average earnings.

Hometrack director of research Richard Donnell said: “There remains further upside for city level house prices over the remainder of 2015.”

He added: “As an international city, London is out on its own, setting new highs for prices and affordability. How long this can be sustained is down to the prospects for the different segments of demand, specifically international buyers, domestic investors and domestic home owners.”

The city that fell furthest below their 2007 peaks is Belfast, where average house prices are 47.6 per cent of what they were in eight years ago.