Residential house price growth in the UK continues to slow across many regions, lead by the capital, according to the latest Hometrack UK Cities House Price Index.
The report shows that annual home price inflation has slipped to 6.4%-the lowest level for 42 months. This is perhaps unsurprising given the fact that property values in the capital have risen by 85% since 2009.
Slowdown
Slower market conditions in London have led to a slowdown in the headline rate of growth for the Index. This is now running at 6.9%, down from 7.2% last month and from 7.9% one year ago.
This 20 city average now stands at £245,900, a fall from £244,300 recorded last month. Bristol remains the fastest growing city in the Index, with annual growth here staying at 9.5%.
Away from the South, Manchester saw the largest increase in prices, up 8.3% year-on-year. Birmingham and Liverpool have also seen significant increases, with affordability remaining attractive.
Richard Donnell, Insight Director at Hometrack, noted: ‘Growth in London has been superseded by large regional cities such as Manchester, Liverpool and Birmingham. When you consider that house prices in London are 85% higher than they were in 2009 it is not surprising that the pace of increases is slowing toward a standstill as very high house price increases mean affordability is stretched.’[1]
House price growth in the UK slows again
Contrast
Continuing, Donnell said: ‘The contrast with large regional cities outside of London and the South East couldn’t be starker. They continue to register robust levels of house price inflation in excess of 7%. The question is how much further house prices in regional cities could have to run were house prices to fully price in low mortgage rates supported by rising incomes and employment.’[1]
‘In our view there is material upside for house prices in the coming years in many cities where the recovery since 2009 has been limited. Typically those where there is investment in employment, infrastructure and regeneration will help stimulate the local economy. The timing and scale of future house price growth will, of course, depend upon the outlook for jobs, incomes and mortgage rates,’ he concluded.[1]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/2/uk-house-price-growth-continues-to-slow