House prices: average house has risen £15,300 in the last year

Prices in Cambridge and London have increased by over £50,000 and £60,000 respectively over the last year

A new house price survey looking at selected UK cities shows the three cities with the highest growth over the last 12 months are London (18.1 per cent), Cambridge (17.9 per cent) and Bristol (14.1 per cent). Glasgow (4.3 per cent) and Leicester (4.8 per cent) experienced the lowest growth.

The findings from Hometrack show average house prices have risen £15,300 in value in the last year.

Eight cities are now above their 2007 peak. Cambridge heads the list with a 32.5 per cent increase followed by London at 29 per cent. This means that while house prices in Cambridge and London have increased by over £53,000 and £60,000 respectively over the last year, those in Glasgow have only risen £4,500 on average. Belfast house prices are 51 per cent lower than in 2007

"Local economies drive their local housing markets. Cities are the focus for employment and business growth, which in turn creates demand for housing. By focusing on cities, we can get a more accurate picture of the health of the housing market," said Richard Donnell, Research Director at Hometrack.

"Expectations that strong house price growth in the south of England would ripple out across the country were over-done. While house price growth has increased across all cities in the last year the rate of growth in the majority of cities is below the UK average. There is little evidence of a runaway surge in prices and the rate of growth appears to be moderating."

Hometrack estimates that the 20 cities covered in the report contain a third of all homes and 43 per cent of the value of the UK housing market.

Earlier in the week, figures from Sequence, owners of brands including Barnard Marcus and William H Brown, indicated that UK house prices, excluding London, had rise nine per cent annually to an average of £182,987

David Plumtree, Chief Executive at Sequence, said: "What we are seeing is a return to normality in the housing market. The divergence between supply and demand has been the root cause for the rise in UK house prices and this tug of war appears to be subsiding. Rather than the endless speculation of bubbles and busts, the market is recalibrating and as a result is more stable and healthy.

"Now that inflation has dropped, it is even more likely that we will not see interest rate rises until at least after the election next year. I would therefore expect mortgage deals to remain attractive and confidence in the market to be strong for the rest of the year."