Surging house price growth is being driven by cities with the UK’s best universities, Hometrack’s UK Cities House Price Index data shows.
Surging house price growth is being driven by cities with the UK’s best universities, Hometrack’s UK Cities House Price Index data shows.
In the year to December 2015 house price growth in UK cities rose by 11.4% with the help of a 14.4% rise in Cambridge, a 13.8% rise in London and an 11.9% rise in Oxford.
The University of Cambridge, University of Oxford and the capital’s London School of Economics and Imperial College London are the top four universities according to The Complete University Guide.
City house price growth is accelerating, as the 11.4% figure represents a rise from 10.2% in November and 8.9% in the year to December 2014.
James Hammond, managing director of Cambridge-based mortgage broker Limetree Financial Services, said: “There’s a tremendous amount of buy-to-let investors that want to get into the market and a lot of them have spent time at Cambridge in the years gone by.
“A lot of foreign investors want to buy properties for their kids to live in at university – the pool of buyers is increasing.
“We see properties daily with multiple offers. To go 5 or 10% above asking prices isn’t an unusual situation in Cambridge.”
Hometrack agreed that rental demand is driving growth in city house prices compare to the rest of the UK.
Richard Donnell, Hometrack’s insight director, said: “Much has been made of the impact of tax changes for buy to let investors with mortgaged property and the proposed new 3% stamp duty levy from April 2016.
“The latest Bank of England Credit Conditions Survey for 2015 Q4 suggests continued strong demand for mortgages from buy to let landlords while demand from existing home owners softened over Q4 2015.
“Some investors may look to move before April, we expect others will need to sell to support de-leveraging of their portfolios in order to reduce tax liabilities. This will bring much needed new supply to the market, especially for smaller sized homes.”
He added: “In the very near term the current momentum in house price growth looks set to translate into continued double digit price rises but we expect this to moderate as external factors start to weigh on market sentiment and affordability pressure finally catches up with high growth markets.”
