Annual price growth in key UK cities down to lowest level for seven years
Property price growth in 20 key UK cities has slowed to 1.7% year on year, the lowest growth since May 2012 and has moved into cities across southern England, the latest research shows.
But cities in the North are still seeing strong annual growth, led by Liverpool, up 5.7%, Leicester up 5.6%, Manchester up 5.1%, Glasgow up 5%, Belfast up 4.7% and Nottingham up 4.6%, according to the Hometrack index.
At the other end prices fell by 0.6% in Oxford, by 0.4% in Aberdeen and were flat in London. They increased by just 0.7% in Southampton and by 0.9% in Cambridge.
Sales volumes are also weakening in southern cities where they are now 13% lower than in 2015. Weaker demand has steadily reduced the rate of residential property price inflation, the index report says. But in some regional cities sales are up to 19% higher than 2015.
The report says that the data shows that weaker market conditions are spreading out from London into cities across southern England as affordability pressures grow and moving costs increase.
All six cities covered by the index in southern England, outside London, are recording the lowest growth rates since 2012, ranging from a fall of 0.6% in Oxford to a rise of 2.2% in Bristol while sales are down by 20% in Cambridge, in line with the decline in London, and by 12% to 13% in Portsmouth and Bournemouth.
‘Falling sales volumes after a prolonged period of high house price growth is part and parcel of the unfolding housing cycle. The reality is that the more house prices increase over time, the more buyers are priced out of the market through a mix of affordability factors and higher moving costs,’ the report says.
The figures also show that the cities with the greatest increase in house prices have registered a steeper decline in sales since 2015, the year with the highest overall sales since 2007.
The weakest rate of house price growth in just over six years demonstrates the current difficulties faced by many residing and selling in our major cities, according to Marc von Grundherr, director of agents Benham and Reeves.
‘City living will always command a higher price premium and while these markets are more susceptible to the influences of Brexit doom and gloom at present, they will also be the first to see a sharp revival,’ he said.
But he does not believe that demand has weakened in London. ‘The capital remains the pinnacle of UK property investment and homeownership and a prolonged period of political uncertainty won’t change that. While a larger degree of buyers remain on the fence for the time being London certainly hasn’t fallen out of favour and remains the most in demand region of the UK,’ he added.