Annual house price growth across the UK’s ‘Big Six’ regional cities has remained consistent despite the challenges posed by higher interest and mortgage rates, according to research from global property advisor JLL. 

The company’s ‘Big Six’ report, which tracks residential development activity, prices and rents across Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow, revealed that annual sales values have grown by 1.9% over the past year.  

However, the research also highlighted a shift in buyer preferences towards more affordable markets, with Glasgow and Leeds experiencing the highest annual growth. 

Demand for rental properties across the six cities has also remained robust, driven by young professionals seeking the lifestyle benefits of city centre living.  

Even so, JLL’s research shows the rental market has become more balanced this year, with annual growth, which had soared to double-digit highs in H1 2023, now moderated to an average of 6.6% across the ‘Big Six’ cities.  

This, combined with higher debt costs and resulting viability challenges contributed to the slowdown of investment in Build to Rent (BTR) down 77% from 2023 to £217m. Only Manchester (with Salford) and Leeds have secured capital so far this year with Leeds the most active of the six cities, benefitting from the largest BTR deal in H1 2024.  

Notably, over half of this investment has shifted to suburban single-family rentals for the first time on record.   

Marcus Dixon, Head of UK Living and Residential Research at JLL, says: “So far, the 2024 housing market has presented a complex landscape as increasing interest and mortgage rates temper growth, creating challenges for both buyers, tenants and developers across our Big Six.  

“Although the sales market faces headwinds, the rental market, especially at the upper end, remains strong. Looking ahead we only anticipate an uptick in activity across the Big Six, with markets and mortgage lenders already reacting positively to the recent interest rate reduction.  

“It looks like 2024 is shaping up to be a year of cautious optimism that should only escalate as we move through the year.”