A quarter of cities 'struggle to match house prices of a decade ago'

House prices in a quarter of the UK’s largest cities are struggling to recover to the level they were at during the height of the financial crisis, according to the property consultancy Hometrack.

Prices in Belfast, Liverpool and Aberdeen are still lower than they were in July 2008, shortly before the crisis which was triggered by the collapse of investment bank Lehman Brothers in September 2008. 

Meanwhile Newcastle and Edinburgh have experienced weak single digit growth. 

At £129,629, prices in Belfast are 28 per cent lower than they were a decade ago, highlighting how hard Northern Ireland’s capital was affected.

Aberdeen and Liverpool are also still recovering, with prices down three per cent and one per cent respectively, on where they were a decade ago. 

House prices are just one per cent higher than they were a decade ago in Glasgow and three per cent in Newcastle.

By contrast, homeowners in Cambridge have seen the value of their properties rocket by 70 per cent, on average, to £432,410.

London home owners have experienced nearly as spectacular a rise, with prices up 65 per cent to an average of £483,792 since July 2008.

On a national basis, house prices are 26 per cent above the level they were a decade ago. 

In the past year, UK house prices have risen by 4.2 per cent, led by medium-sized cities such as Nottingham and Leicester, where house prices are rising by 7.5 per cent and 6.6 per cent respectively. 

Richard Donnell, Insight Director at Hometrack, says: “The fact house prices in some of our biggest cities are still recovering from the financial crisis shows how big an impact it had on the UK’s regional housing markets.

“While 2008 was the year when house prices fell at their fastest rate, they continued to fall for a further three to four years in the weaker performing markets as the impact of the recession and restricted credit availability hit the value of people’s homes.

“These past ten years would have been difficult for many homeowners living in these cities, with low prices, weak growth making it difficult to move homes for work or to up-size to accommodate growing families.”

He adds that at the other end of the spectrum prices in Cambridge are 70 per cent higher over the last decade followed by London (65 per cent), Oxford (55 per cent) and Bristol (53 per cent).