Regional cities are enjoying continued property price growth despite the inflation across UK cities falling to 5.4%.
Edinburgh tops the list with an annual growth of 8.2% and an average price of £218,600. There is a close race between the next highest price growth: Birmingham (7.5%), Glasgow (7.2%) and Manchester (7%). All three cities have an average property price below £160,000.
London finds itself fourth from the bottom with a 1.8% growth rate, with a much higher average property price of £488,400.
Although both Oxford and Cambridge share a similarly high average property price as London, £425,700 and 404,400 respectively, their price growth fell into negative figures.
Oxford’s growth rate was -0.9%, while Cambridge’s was even lower at -1.4%.
However, Aberdeen in the North of Scotland is by far the worst with a -9.9% property price growth this year, following an equally tough year last year with a -.4.4% price growth.
The reason behind this drop is growth in these cities is a blend of lower demand, less affordability and economic factors plaguing the market.
Hometrack’s latest index has also observed that underlying market conditions are improving as sellers are no longer having to adjust their asking price expectations in order to secure a sale. Over 2014-2016, sellers were having to reduce their asking prices by 3.2% in order to secure a buyer, however, this has now shrunk to 2.9%.
This reduction has been most notable in Manchester and Birmingham, more than halving from 6% to 2.7% in 2017. So not only are the UK’s larger cities outside of London and the South East driving price growth, but the market is also regaining stability the quickest.
Unfortunately for London homeowners, not only does price growth remain weak but those in the capital are also having to increase the amount they are discounting their asking prices to find a buyer.
In 2014, a discount of just 0.5% was required in a hot London market, but this has since increased to 4%, with London’s inner boroughs stretching to as much as 10%.
See the full Hometrack Index for December 2017 here.
December’s index paints a picture that has remained largely consistent over the last year, showing the UK’s usual supporting cast have continued to assume the mantle from London where driving house price growth is concerned.
Of course, buyers across areas with more affordable house prices did not have to lower their expectations as much over the last year and as a result, are now enjoying a quicker return to market normality.
Those in London and the surrounding areas will have to wait a little while longer, partly due to far greater levels of price inflation, but also due to a refusal to accept the previous market reality and lower their price expectations in the first place.Russell Quirk