The latest Hometrack UK Cities House Price Index reveals a marked slowdown in house price growth over the last three months, led by a deceleration in London and other high value cities across the south of England.
The annual rate of house price inflation across the 20 cities slowed to 9.5% in July after 12 months of higher growth. The shift in momentum was due to growth stalling across a number of cities in southern England over the last quarter.
The annual rate of house price inflation across the 20 cities slowed to 9.5% in July after 12 months of higher growth. The shift in momentum was due to growth stalling across a number of cities in southern England over the last quarter.
In the three months to July house prices in London rose by just 2.1%, the lowest quarterly rate since February 2015. Furthermore, Bristol, which is the fastest growing city over the last 12 months, saw growth over the last 3 months slow to 2.6% from a recent high of 5.0% in May 2016. Prices in Cambridge fell by 1% in the last quarter although over the lst 12 months prices are 7.1% higher.
However, Hometrack can also reveal that house price inflation in many large regional cities in the north of England and Scotland shows no signs of slowing. The rate of annual house price growth in Leeds, Manchester, Birmingham, Liverpool and Nottingham continues to rise by between 7% and 8%. Focusing on activity in the last quarter, the highest rates of growth have been registered in lower value, high yielding cities where prices are rising of a lower base – Glasgow (5.2%), Liverpool (4.4%), Manchester and Nottingham (3.4%).
In Aberdeen the year-on-year rate of growth fell at a slower rate of -8.0% in July with prices up 2% in the last quarter, a sign that the housing market may have adjusted to the impact of falling oil prices on demand over the last 12 months.
Richard Donnell, Insight Director at Hometrack says: “In the absence of adverse economic trends impacting employment and mortgage rates, the near term outlook is for a continued slowdown in London towards mid-single digit growth.
"The slowdown in London is being seen across the market is not accounted for by seasonal factors with weaker demand from home owners and investors as supply grows. This analysis suggests London house price growth will continue to slow over the rest of the year. In contrast, northern regional cities will continue to register stable growth rates as households’ benefit from record low mortgages rates and affordability remains attractive.
“We continue to believe that turnover will register the brunt of the slowdown in London. In the face of lower sales volumes agents will look to re-price stock in line with what buyers are prepared, and can afford to pay. Past experience shows that this process can run for as long as 6 months and relies, in part, in how quickly sellers are willing to adjust to what buyers are prepared to pay.”
RSS Feed
