Homes worth 9 per cent more than last year in Portsmouth, research finds

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THE value of homes in Portsmouth has risen by more than nine per cent in the last year, research has found.

Property analyst, Hometrack, found growth in house prices across 20 cities in the UK has been more than five per cent - the first time since 2004.

The average house price in Portsmouth is now £194,700, according to the researchers.

The report said that by the end of the year, prices in some cities outside the South East could be rising at a faster month-on-month rate than those in London.

Richard Donnell, research director at Hometrack, said: ‘The pick-up in house prices that started two years ago has spread across all UK cities.

‘This latest analysis shows that momentum in house price increases is starting to slow, with less pent-up demand for housing than two years ago.’

Toughened mortgage lending rules came into force in April which mean applicants have to provide more evidence to back up what they say about their spending habits and lenders also have to apply ‘stress tests’ to make sure that borrowers could cope with interest rates rising.

There have been signs that this has dampened the market slightly, alongside suggestions that buyers are becoming more sensitive about sellers’ asking prices as speculation continues over exactly when the Bank of England base rate is likely to increase, pushing up borrowing costs.

Mr Donnell said he expects the rate of house price growth to slow further as the year comes to an end.

He continued: ‘However, there are still bright spots of activity amid reports of a wider national slowdown.

‘For the first time since the financial crisis, an improved economic outlook has seen house prices in cities outside the south of England rising off a low base.

‘By the end of the year, we could well see monthly house price growth in London slipping below that of some of the major cities outside the south east.’