The average house price inflation in UK cities was 5.4 per cent during December 2017 with demand picking pace in a few key locations.

According to UK Cities House Price Index from Hometrack, market conditions are improving across cities, outside south eastern England. Robust growth was witnessed in large regional cities, such as, Edinburgh, Birmingham, Glasgow and Manchester, all registering growth of over 7 per cent annually.

Edinburgh remains the fastest growing city (+8.2 per cent) followed by Birmingham, Glasgow and Manchester. The average house price in Edinburgh is £218,600, which is less than half of London’s price (£488,400). The average house price growth in London in December 2017 was 1.8 per cent.

“There has been continued growth in large regional cities, despite house price inflation slowing to 5.4%. ZPG listings data shows discounts to asking prices are narrowing, indicating market conditions are improving,” Hometrack said.

The other top 10 cities, which saw increase in house price, were Nottingham (6.5 per cent); Liverpool, Bristol, Leeds (all 6.1 per cent); Bournemouth (5.8 per cent) and Leicester (5.6 per cent).

House prices are falling in nominal terms across three cities - Oxford, Cambridge and Aberdeen - a result of weakening demand, affordability and economic factors.