House prices across the UK’s largest cities jumped by the highest quarterly level in 11 years as demand for housing continued to outstrip supply, according to property analyst Hometrack.

The report said house prices across the country’s major cities lifted 4.3pc in the three months to July, the highest quarterly growth since 2004.

It also adds there is scope for further inflation as nine of the 20 cities the survey monitors still have average prices that are lower than their 2007 peak.

It said overall city level house price inflation remains on track for 10pc growth this year, from its July rate of 8.5pc.

The report said a combination of low mortgage rates, economic growth and rising earnings continue to stimulate demand and put upward pressure on house prices.

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