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The annual rate of growth across the UK has has increased by +4.7%. Over the past 12 months, house price growth across UK cities has slowed down but the average property prices have jumped by +3.5% in the last quarter. The capital was hit hard with house prices dropping from +13% growth to only +3% growth in the past year, but there more optimistic numbers are expected throughout 2017.

The city price growth across the UK’s cities has increased +5.1% year on year, but has fallen from +8.8% from the same time last year. Cities in the South of England have been hit the hardest with a slowdown in growth – Cambridge dropped from +13% to a mere +2% since May 2016.

The last quarter’s growth rate is at its best in 3 years, growing +3.5% across 20 UK cities. All the cities included in the index have enjoyed higher prices except for Oxford and Aberdeen over the past three months. Topping the list for price growth are England’s larger regional cities – Birmingham and Nottingham are tied for first place at +3.8%, followed by Newcastle at +3.5% and Manchester at +3.3%. The house in prices in these cities and several other UK cities are growing due to higher demand from lack of stock and lower mortgage rates.

Looking north, house prices are growing and are expected to shorten the drastic price gap between the north and the south.

There are evolving economies in Birmingham and Manchester, which will influence the house price growth as jobs are created and people move towards more affordable city living. However, Brexit and mortgage rates continue to be a threat to property growth.

The house price growth in London is at its worst in five years (+3.3%), expensive price tags and political uncertainty are some of the causes for the drop in numbers but the growth rate is not expected to reach negative figures in 2017.

House Price Index

Some of the capital’s 46 local authorities show price falls when compared to the average price growth across the city. London has seen a drop in price inflation, which today is at +4%-+6% down from +15%-+18% at the same time last year. The high end market has experienced the slowest growth rates, along with some sub-markets (Islington and Hammersmith) in the £600-£800 range that have also seen drops.

House Price Index
Demand for city living seems alive and well despite the farcical political events of late. Other than Oxford, a city paying the price for its previous accolade of UK’s most expensive, and Aberdeen which has suffered due to a declining economy, house price growth across the UK’s major cities seems to have remained stable.
We are starting to see a real shift away from the London in terms of the capital leading the rate of price growth in the UK and a transfer of power across the Midlands and the North. The market in London and the South East, in particular, was teetering on an election knife edge, but the less than satisfactory result means that prices in the regions are likely to stay flat for the remainder of the year now.

 

Russell Quirk

Founder & CEO, eMoov.co.uk