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UK house prices increased by 4.3% in the three months to July 2015, the highest quarterly growth for eleven years, according to housing analyst Hometrack.

The firm's latest UK Cities House Price Index reports that house price inflation in 20 of the UK's cities reached 8.5% in July, compared to 7.2% in April.

The consultancy also says that transaction volumes have increased by 32% since April and mortgage lending for home purchases has risen by 26% during the same period.

Of the 20 cities researched by Hometrack, Cambridge recorded the highest annual growth of 10.9%, followed by Oxford, London and Bristol.

The lowest figure was recorded in Aberdeen at -0.7%. 

The highest quarterly growth was also recorded in Cambridge (7.3%), while Aberdeen again posted the lowest growth figure at -1.4%. 

Nine of the twenty cities still have average prices that are lower than 2007 levels, although Hometrack says this gap is narrowing rapidly.

For example, prices in Liverpool and Glasgow remain below their 2007 peak, by 13% and 11% respectively.

“There remains further upside for city level house prices over the remainder of 2015. Low mortgage rates, economic growth and rising earnings will continue to stimulate demand and put an upward pressure on prices,” says Richard Donnell, director of research at Hometrack.