The latest figures from Hometrack show that UK city house price growth is running at 5.1% per annum, down from 8.8% in June 2016.
According to the report, house price inflation has picked up in recent months. Growth in the first half of 2017 ranges from 0.2% in Aberdeen to 6.1% in Birmingham. This is consistent with an 11% increase in home purchase mortgages which are also 5% higher than the 5 year average.
Thirteen cities with lower annual growth
Thirteen cities have a lower annual growth rate than a year ago. London, Bristol and Oxford have recorded the greatest slowdown as affordability and uncertainty impact demand. The rate of price falls in Aberdeen has slowed sharply.
House price growth is higher in seven cities, but the scale of the increases compared to June 2016 are more modest. The exception is Edinburgh where the rate of growth has bounced back from 1.8% a year ago to 6.5% today.
Negative real house price growth
Nominal house price growth in four cities is failing to keep pace with the rate of consumer price inflation which is 2.6% – Cambridge (1.9%), Oxford (2.1%), Newcastle (2.4%) and Aberdeen (-2.7%). House price growth across London City has fallen to a 5 year low of 2.6% meaning prices are flat in real terms. Inner London markets have the lowest rates of house price growth and are registering real price falls.
16 cities have average prices above 2007 peak
Sustained house price growth in large regional cities has pushed house prices ahead of their 2007 peak in sixteen cities. At current growth rates it will be another 2 years before Newcastle, Glasgow and Liverpool exceed their 2007 levels. Belfast will take much longer with prices still 45% lower than in 2007.
Russell Quirk, ounder and CEO of eMoov.co.uk, commented: “City living will always drive the UK market and so it gives a good indicator of where is quickest out of the blocks while the overall market is still wiping the post election sleep out of its eyes. The latest data from Hometrack suggests that the UK market has also almost broken free from the shackles of Brexit uncertainty, with the market performing notably better than last year.
It is a mixed bag of sweets in terms of the current UK market and London seems to be the liquorice where buyer demand is concerned, a classic favourite, but an acquired taste and one that is waning in popularity – particularly inner London. Other areas such as Bristol, Oxford and Cambridge are also paying the price of their much higher price tags with slower growth, whilst Britain’s second city has come to the forefront in terms of the best property price performance, joined by the regionally varied ensemble of Edinburgh, Leeds, Manchester and Nottingham.”
Nick Leeming, Chairman at Jackson-Stops & Staff, comments on the Hometrack UK Cities House Price Index: “The property market in key UK cities has proven resilient to Brexit fears and election uncertainties, with vibrant areas such as Birmingham and Manchester experiencing strong annual house price growth. It comes as no surprise however that inner London markets are experiencing a slowdown. The reduction in price levels is a result of the Draconian property related tax measures brought in over the last few years, which is restricting buyers and sellers from making a move unless it is completely necessary.
Growth in London prices has now slowed to the lowest rate for over five years and although change is needed from the Government to get the market moving again, it is not all doom and gloom. London’s global safe haven status means that its appeal among investors both in and outside the EU will continue to endure in the long term. Our London Group has in recent months experienced a significant influx in buyers from Asia and the Middle East and this is only set to increase as the political dust starts to settle.”