Andrew Asaam, Mortgages Director at Halifax, for comments on the increase in house prices in cities this year, with the demand for space easing amongst homeowners.

Increasing demand for homes in British cities was the driving force behind the rapid house price inflation witnessed earlier this year, with property prices in urban centres growing at a faster rate than their surrounding areas, according to new analysis from Halifax.

The impact of the pandemic on people’s lifestyles had driven much stronger house price growth in suburban and rural areas over the previous couple of years, as buyers sought larger properties with more indoor and outdoor space, and where homeowners perceived they’d get better value for money.

However since the start of the year, as people increasingly returned to the office and were once again able to make the most of leisure opportunities, property prices in cities have grown by +9.2%, while in surrounding areas it was much less, at +7.9%.

Andrew Asaam, Mortgages Director, Halifax, said:

The pandemic transformed the UK housing market. Homeowners wanted bigger homes and better access to green spaces, fueling huge demand for larger properties away from urban centres...

That trend didn’t disappear completely this year, as house price growth in these areas remained strong. But, as daily life started to get back to normal for many, the opportunity to live in cities became more attractive again, driving up demand.

Full release: Cities have driven house price growth this year, as demand slowed in the suburbs

✉️ Gregor Low, Lloyds Banking Group, 07500 078 879 / gregor.low@lloydsbanking.com