There has been a marked slowdown in house price growth in major UK cities in the past three months – led by London – according to the latest analysis by Hometrack
The annual rate of house price inflation across 20 of the largest cities slowed to 9.5 per cent in July after 12 months of higher growth. The shift in momentum was due to growth stalling across a number of cities in southern England over the last quarter.
In the three months to July house prices in London rose by just 2.1 per cent – the lowest quarterly rate since February 2015 – while Bristol, which is the fastest growing city over the last 12 months, saw growth over the last three months diminish to 2.6 per cent from a recent high of 5.0 per cent.
Prices in Cambridge actually fell by 1.0 per cent in the last quarter.
However, Hometrack says house price inflation in many large regional cities in the north of England and Scotland shows no signs of slowing yet.
The rate of annual house price growth in Leeds, Manchester, Birmingham, Liverpool and Nottingham continues to rise by between 7.0 and 8.0 per cent.
In Aberdeen the year-on-year rate of growth fell at a slower rate – it’s down 8.0 per cent in July, with prices on average rising 2.0 per cent in the past quarter – which Hometrack says is a sign that the housing market may have adjusted to the impact of falling oil prices on demand over the last 12 months.
“The near term outlook is for a continued slowdown in London towards mid-single digit growth. The slowdown in London is being seen across the market is not accounted for by seasonal factors with weaker demand from home owners and investors as supply grows” says Richard Donnell, Insight Director at Hometrack.
“This analysis suggests London house price growth will continue to slow over the rest of the year. In contrast, northern regional cities will continue to register stable growth rates as households’ benefit from record low mortgages rates and affordability remains attractive” he adds.