Regional cities see strong price growth
The difficulty for renters of getting on the housing ladder could be getting even greater in regional cities after new data showed price growth in these centres of population has been running at elevated levels.
Across the country, prices rose by 6.1 per cent in the year to October 2017, the highest rate of growth in 13 months, according to Hometrack. This is above the overall UK increase of 4.7 per cent, which is weighed down partly by London's low growth.
By contrast, many other cities are booming, with Manchester seeing the highest growth at 7.9 per cent, followed by Birmingham at 7.4 per cent. Leicester and Bristol were joint third at 6.6 per cent.
Although the Manchester and Birmingham average prices remain below the national mean figure, at £158,800 and £155,600 respectively, the increases will still make buying harder for first-time buyers in cities where many are on low incomes.
Moreover, in both cities there are contrasts between different areas, with the central areas in particular seeing substantial increases in their populations as large numbers of apartments are built. Many of these are for rental purposes, but others are highly priced and aimed at well-paid professionals.
Some regional cities do buck the trend, however; Aberdeen was down 35 per cent and Oxford 0.6 per cent. The latter figure may be a rebound from rapid price growth of 6.6 per cent in 2016, while the Granite City has been suffering an economic slump due to falling oil prices.
Just three regional cities had lower price increases than London: the other was Cardiff, where prices were up 2.8 per cent. Newcastle matched the three per cent increase seen in the capital.
Manchester and Birmingham may be enjoying strong gains due to their contrasting fortunes compared to places like Aberdeen. Both have seen plenty of recent government investment as part of the Northern Powerhouse and Midland Engine projects, with new technology such as the use of graphene and improved infrastructure being notable developments.