Property prices in key cities in the UK increased by 3.2% year on year in the 12 months so September 2018 but this annual growth is down from 3.8% in September 2017, the latest index data shows.
But annual price growth in five cities still exceed 6%, led by a rise of 6.9% in Liverpool, 6.5% in Birmingham, 6.4% in Leicester, 6.2% in Manchester and Glasgow, according to the Hometrack index.
In London house prices have fallen in 63% of boroughs year on year, but the index report suggests that the decline is slowing and the housing market is stabilising. Overall prices are down 0.4% year on year but have increased slightly in the last six months.
The biggest fall in prices was in the borough of Kensington in Chelsea where values fell by 4.9% year on year to an average of £1.17 million while in Camden prices fell by 4.3% to £737,000 and in Hammersmith and Fulham by 3.1% to £707,000.
However, overall the number of London postcodes registering month on month price falls has dropped to 44% from a peak of 70% in December 2017. This means that 56% of postcodes are now registering month on month price gains, implying the proportion of markets registering annual price falls will slow further over the rest of the year.
Prices in Barking and Dagenham rose 2.3% year on year to an average of £296,400. Havering, Spelthorne and Bexley recorded the next highest rise in home values, with prices increasing1.4% year on year in each area.
‘London’s housing market has registered a major slowdown in price growth over the last two years as stretched affordability levels, multiple tax changes and weaker market sentiment have all impacted the demand for housing. Turnover has fallen much more than prices which tend to be stickier on the way down with few households being forced sellers,’ said Richard Donnell, insight director at Hometrack.
‘Our latest analysis reveals price falls are concentrated in inner London while values continue to rise slowly in the most affordable parts of outer London and the main commuter areas. Price growth has firmed over the last six months but the annual rate of growth remains negative and we expect the current re-pricing process to run into 2019,’ he explained.
‘City level house price growth remains well above average in the most affordable cities. While the rate of growth has moderated slightly prices in five cities are still rising twice as fast as the growth in earnings. We expect continued price growth in the most affordable markets over the remainder of the year,’ he added.
Strong economic hubs in the Northern powerhouses are making buying more attractive for buy to let landlords, according to Danny Belton, head of lender relationships at the Legal & General Mortgage Club.
