Whilst the annual rate of house price growth across the UK’s key cities has slowed, eleven of them still have prices rising faster than one year ago.
Across the country’s 20 key cities, prices have increased by 5.3% over the 12 months to April 2017, which represents a drop from the 8.7% recorded in April 2016, latest figures from Hometrack revealed.
Flat prices have seen the biggest increase over the last 7 years
Currently showing the biggest annual growth is Manchester at 8.4%, followed by Leicester and Birmingham, both at 7.7%.
The capital, however, is a completely different story. The Hometrack index showed an annual growth rate for London of 3.5%, which is a considerable drop from the 13% recorded one year ago (April 2016).
Quarterly house price growth averaged at 3.2% for the three months to April 2017 with only Manchester, Birmingham, and Edinburgh recording a higher rate at 4%, 3.8% and 3.7% respectively.
The Hometrack report put the trend for a constant growth of figures in the North down to the weaker levels of demand in southern cities like Oxford, Bristol and London, paired with low affordability and tax changes.
Hotel of Mum and Dad: Rising house prices make Generation Rent stay at home for longer
The report stated:
“Looking ahead we expect current trends to continue with house price growth losing momentum in cities across southern England where housing unaffordability is at a record high and has priced large numbers of households out of the market. Weaker investor demand supports this trend, taking demand out of the market and adding to supply as investors look to rationalise and de-leverage portfolios in the wake of tax changes.”
For the rest of 2017, the report predicts a slowdown in house price growth in London down to 2% or 3%. And points out “the underlying level of consumer price inflation increasing this means London is set to record a real terms drop in prices over 2017, the first time this has happened since 2011.”
