House prices rise in UK's big cities, says Hometrack

Houses in Liverpool Image copyright PA
Image caption House prices in Liverpool were among the fastest risers

House prices in cities such as Liverpool, Cardiff and Southampton rose sharply in the first three months of the year, a survey has suggested.

Hometrack, which monitors property prices in 20 UK cities, suggested that the increase was driven by interest from buy-to-let investors.

It recorded house price growth of 4.1% in Liverpool and London in the first quarter of the year.

This was the fastest rise among cities across the country, it said.

Over the 20 cities as a whole, house price growth was at its strongest for 12 years in the first three months of the year.

A regular "Spring bounce" in the market was extended by a move by investors to avoid the change in stamp duty on 1 April. A 3% stamp duty surcharge has now been introduced for purchases of homes that are not the buyer's main residence.

On Thursday, figures from HM Revenue and Customs said that 161,990 properties were sold in the UK in March, the highest monthly number since June 2006, and up from 92,690 sales in February.

Gross mortgage lending hit £25.7bn in March, the Council of Mortgage Lenders (CML) said. This was 59% higher than in the same month a year earlier.

Richard Donnell, insight director at Hometrack, predicted that activity in the market would now fall away, echoing a number of other commentators.

"We believe house prices will continue to rise but a moderation in investor demand and greater caution in the run up to the EU referendum will limit further acceleration in prices," he said.

"Most likely the rate of growth will slow more rapidly in high-value, low-yielding cities such as London where prices will be more responsive to weaker investor demand."

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