The latest Hometrack UK Cities Index for November has been released charting price growth across the top 20 major UK cities. The latest index shows that price growth across these cities is currently at 6.3%, up from 4.9% a year ago.
Hometrack also reported that those cities to have seen the weakest recovery since the market crash in 2009 are now those enjoying the highest rate of price inflation. This growth has been largely led by regional cities outside southern England with Scottish cities, Glasgow and Edinburgh, leading the way.
Leicester, Birmingham, Manchester, Nottingham, Liverpool and Bristol have all also enjoyed year on year price growth above 6%. Aberdeen continues to prop up the table as the only city to have seen a negative movement in price growth, while Oxford has managed to reverse the previous negative movement seen, the city continues to see very low year on year growth at just 0.7%.
Along with Cambridge, these are the only three cities to slump below the capital, with London up 2.7% annually as it continues to be one of the worst hit by buyer uncertainty.
A year ago Hometrack predicted that prices would increase by 4% while the recovery in regional cities would offset low nominal growth in London, so the market has increased at a greater than expected rate. For 2018, an increase in earnings above the 15-year average and the continued reduction of Brexit uncertainty means price growth should persist and Hometrack predict a 5% increase across the board, although growth in the capital is expected to remain subdued.
A strong end to the year for city price growth and particularly positive for homeowners seeing a strong uplift in prices across those cities that have struggled to recover since 2009.
A 5% growth forecast for 2018 is probably realistic but the UK market is a mixed bag and there is a drastic difference even between cities within a fairly close proximity to each other, with the likes of Glasgow and Birmingham performing far better than Aberdeen and London for example.
A 5% growth forecast is perhaps a little optimistic for those at the bottom end of the table, especially homeowners in London. A 3% increase across the capital is probably the best we will see in 2018, but positive signs for the market as a whole and momentum that will no doubt continue to build over the coming year.Russell Quirk