City house prices have outpaced the country with Chichester recording a 62% rise in property values over the last five years.
The report from Lloyds Bank reveals the greatest rise in house prices in the last five years is for Chichester in the South East increasing 62% compared to 37% for the UK average.
Average property values in 2018 for Chichester were £450,023 with gains for homeowners of £172,369 followed by Cambridge in East Anglia rising 61% or £170,150 and values of £448,583.
These cities are among the least affordable for first time buyers and home movers with house price to earnings ratio of 11.5 for Chichester and 10.3 for Cambridge compared to the national average of 7.2.
Rising houses prices has benefited existing homeowners as remortgage buyers can now release capital for home improvements.
Significant gains outside of London
Winchester is home to King Arthur’s legendary Round Table, recording the biggest price rise of any UK city over the past decade with a gain of 93%, next is Chichester up 76% and London up 69%.
The following table from Lloyds Bank shows house price growth for the top ten cities with average house prices and change over five years to 2018.
| City | House Price | 5-year change |
|---|---|---|
| Chichester | £450,023 | 62% |
| Cambridge | £448,583 | 56% |
| Newcastle upon Tyne | £223,549 | 54% |
| Ely | £298,357 | 54% |
| Lichfield | £324,594 | 52% |
| Bristol | £306,170 | 51% |
| Lisburn | £184,987 | 51% |
| Birmingham | £207,751 | 50% |
| Manchester | £196,259 | 48% |
| Sheffield | £195,351 | 48% |
Many cities across the country have experienced higher than average house price growth such as Newcastle upon Tyne rising 54% or £80,589 with average property value of £223,549.
For buy-to-let landlords with existing properties the rise in house prices creates more equity which they can benefit from if they sell in the future.
Andrew Mason mortgage products director Lloyds Bank said, buying a home in UK cities remains challenging, as average house prices are outpacing wage growth.
However the market has seen the number of first time buyers at a high and homeowners are still attracted to cities across the UK in spite of rising costs, says Mr Mason.
For home movers leaving areas with the highest rising property values to areas with lower growth, they may have extra equity for a deposit to buy a larger home or can reduce their mortgage.
Least affordable cities in the country
Oxford is the least affordable city with a house price to earnings ratio of 12.6 based on average property values of £460,184 and average earnings of £36,430.
There are seven cities with above 10 times the average annual earnings including Chichester on 11.5, Winchester with 11.3, Truro at 11.1, Greater London, Bath and Cambridge all with 10.3.
London does have wide variations across the capital with central boroughs significantly less affordable than Greater London where the average property value is £521,116.
High property values for cities in the South East allows equity release buyers access wealth using a lifetime mortgage to help maintain their standard of living, home improvements or holidays.
The most affordable city with house price to earnings ratio of 4.4 is Sterling in Scotland while Bradford on 4.6 is the most affordable city in England and Swansea on 5.5 the most affordable city in Wales.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as repay an interest only mortgage or pay for care at home.
