The latest cities index from Hometrack has been released, showing that city house price growth is up 6.1% with regional cities enjoying the strongest growth.
The index also shows that the house price to earnings ratio in the capital has reached a staggering 14.5x, with three other cities seeing the ratio move over 10x.
The Hometrack Cities Index is the only house price index of its kind, measuring the rate of property price growth across 20 of the UK’s major cities.
With the London market slowing the top spot for city price growth remains up north, with Manchester leading the way as the fastest growing city with an annual increase of 7.9%.
Birmingham, Leicester, Bristol and Leeds have all also enjoyed an annual rate of increase above 6%.
Unfortunately for homeowners in Aberdeen, the city continues to see a decline, down -3.1% year on year, with Oxford also still paying the price for its high price of property, also down -0.6% annually.
This month Hometrack also updated their analysis of housing affordability and there’s no surprise that while the housing market may be slowing in London, it still remains the top of the pile where the house price to earnings ratio is concerned, with property now 14.5 times the average wage.
It is joined at the top by university rivals Oxford and Cambridge and perhaps less predictably, Bournemouth as the only four cities in the UK where the deficit has stretched into double figures.
For those looking for the best balance, Glasgow, Liverpool and Newcastle have all seen well below average house price growth over the last ten years, although this has started to accelerate so those thinking of buying should act quick.
Overall, yet more promising signs for the UK market with city house price growth remaining buoyant in the face of tough market conditions.
The recent abolition of first-time buyer stamp duty may assist this level of growth as a rejuvenated level of buyer demand further outstripping the supply of housing will see prices continue to climb in the long-term.
For many trying to get a foot on the ladder, the stamp duty changes will be of little comfort given the continued increase in prices, as the obstacle of affordability and the gulf between this and the earnings on offer is already rather sizable and preventing them from taking that first step.
London continues to be a shining beacon of unaffordability where the earnings to property price ratio is concerned, and it is unlikely that any reprieve of first-time buyer stamp duty will do anything to change that.Russell Quirk