According to a recent report by Hometrack, growth in house prices in our regional cities is continuing to outstrip that of London, with Bristol and Manchester seeing the largest increases.
Manchester is now vying for top spot with a growth of 8.9% compared to Bristol's 9.6%. For Manchester, the rate price inflation is at its highest since July 2005. But why is London falling behind in the rankings?
Hometrack suggests that demand is falling in London because of high levels of unaffordability. With an average house price in excess of £580,000, about 14 times the average salary, many citizens struggle to obtain a mortgage, and house price growth in the capital is projected to slow further over the year. Other cities outranking London in the list of house price growth include Oxford, Portsmouth, Southampton and Birmingham.
However, to suggest that this means the traditional North-South divide is lessening is inaccurate. House prices in Scotland, for instance, showed slower growth than London, which at 7.3%, is still considerably higher than Glasgow (4.9%), Edinburgh (3.7%) and Aberdeen (-3.2%).
So while the divide isn't disappearing, it is true that in Manchester, and to a lesser extent Birmingham (7.5% growth), market conditions are stronger than in the capital. But what does this mean for Mancunians? It's a double-edged sword. The supply of homes is just keeping pace with the demand, which is maintaining the upward pressure on prices. That's good news for homeowners, many of whom will have increasing equity in their homes, but not so good for first time buyers or those wishing to move up the property ladder, who will find their finances squeezed.
The promised Housing White Paper this month will demonstrate whether and how the Government will build on its pledge to provide a stock of affordable homes.