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House price inflation falling as pace of growth slows across south

Annual house price growth has fallen to 8.2% as the slowdown in cities across the south of England intensified in August.

Hometrack published its latest data covering 20 UK cities this morning.

The index recorded its lowest level of quarterly growth for six months as a seasonal lull in market activity combined with weaker demand post Brexit and the April Stamp Duty change reduced the pace of house price growth.

Bristol continues to register the fastest rate of annual growth (13.1%) followed by London (10.4%) but growth in both cities is slowing.

A similar trend is evident in most cities in southern England including Cambridge, Oxford and Bournemouth where annual growth has eased in the last few months.

Cambridge has registered the fastest deceleration in growth from an annual rate of 16% in March to just 6% today as affordability pressures and weaker investor demand impact growth.

Liverpool and Glasgow have recorded the fastest growth in the last three months. In both, average house prices of £114,000 are more than half the price of the 20-city average (£239,400).

Richard Donnell, insight director at Hometrack says: “On current trends, house price growth in London will be running at c.6% per annum by December and on course for low single digit growth by spring 2017.

“Record unaffordability, tax changes impacting investor demand and high Stamp Duty costs are all combining to reduce market activity in the face of rising supply.

“Despite the overall slowdown in London, it is dangerous to view the capital as a single housing market.

“While many of the central boroughs have seen low rates of growth, in parts of outer London where house prices are 30% lower than the London average, such as Barking & Dagenham and Havering, prices are rising by more than 15% although these areas are starting to slow.

“Regional cities such as Glasgow, Liverpool, Birmingham and Edinburgh have all posted above average growth in the last three months as low mortgage rates and affordable property prices support growth.”

City Average price % yoy  August 2016 % last quarter to August 2016
Liverpool £114,300 7.2% 4.1%
Glasgow £113,900 4.5% 2.7%
Aberdeen £184,800 -6.7% 2.3%
Edinburgh £203,800 3.3% 2.2%
Birmingham £144,400 8.0% 2.1%
Manchester £147,500 7.4% 1.9%
Nottingham £137,900 7.5% 1.8%
Newcastle £127,700 4.1% 1.7%
Bristol £256,100 13.1% 1.7%
Portsmouth £217,400 9.0% 1.5%
Sheffield £128,700 3.4% 1.3%
Southampton £214,200 7.7% 1.2%
Belfast £123,100 3.1% 1.2%
London £475,700 10.4% 0.9%
Oxford £409,800 8.1% 0.9%
Leicester £151,400 5.6% 0.7%
Bournemouth £263,500 6.2% 0.4%
Cardiff £188,100 6.3% 0.3%
Cambridge £407,200 6.0% -0.4%
Leeds £148,800 4.8% -0.8%
20 city index £239,400 8.2% 1.9%
UK £202,400 7.4% 1.6%

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