Bristol has become the first city outside of the South East to record greater house price growth than London for more than six years, according to the latest UK Cities House Price Index from Hometrack.
House Price Growth in Bristol Surpasses London
Annual house price growth in Bristol reached 14.1% in May, surpassing London (13.8%) and Cambridge (13.4) to top the chart.
Hometrack reports that this trend has seen large regional cities experiencing the highest growth rates over the past three months, led by Liverpool (5.4%), Bristol (4.2%), Manchester (3.9%) and Leeds (3.7%), driven by an improving economic outlook and strong demand from landlords ahead of the 1st April Stamp Duty deadline. Overall, city level house price growth rose from 10.8% in April to 11.2% in May.
However, London was one of eight cities to record slower annual house price growth, down from 14.2% in April to 13.8% in May.
House price growth across UK cities
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Hometrack expects to see a rapid deceleration in house price growth over the next six months, particularly in the capital, as buyers approach a wait-and-see approach to assess the short-term impact of the Brexit.
The Insight Director at Hometrack, Richard Donnell, comments: “House price inflation in major cities outside of London and the South East, such as Bristol and Liverpool, has been accelerating, but it is now expected to slow towards low single digits in the coming months, as demand cools on the back of the EU referendum result. At present, we expect housing market turnover to bear the brunt of increased uncertainty rather than house prices.
“Standing back from the immediate turmoil in financial markets, the reality is that the fundamentals of the housing market remain unchanged, with record low mortgage rates and a wide imbalance between supply and demand. The UK doesn’t have a problem with housing demand – the more important question is how many buyers and sellers feel confident to participate in the market in the near term.”
He adds: “Market sentiment can change quickly, and the sooner a clear picture emerges over the likely impact on the economy and the outlook for jobs and mortgage rates, the sooner transaction volumes should stabilise and more buyers return to the market.”