Property prices in key cities in the UK increased by 2.7% nationally in 2018 but this was half the average annual rate over the last five years, the latest index data shows.
But some regional cities are seeing much stronger annual price growth with prices in Edinburgh up 7% in the 12 months to December 2018, according to the figures from Hometrack.
In Liverpool prices increased by 6.3% year on year, followed by growth of 5.9% in Birmingham, Nottingham and Cardiff, and a rise of 5.8% in Manchester while in Aberdeen they fell by 6.1%, by 3.8% in Cambridge and by 0.2% in London.
Hometrack believes that prices are set to continue growing at an above average rate in regional cities in 2019 with the highest growth rates in cities where the jobs market is strong and added that 10 cities have recorded double digit price growth of up to 16% since the nation voted to leave the European Union in June 2016.
At a national level, it predicts that first time buyers look set to overtake existing home owners as the largest group of home buyers. ‘We expect first time buyers to be the largest buyer group in 2019. This group are an important source of housing demand in regional cities where affordability is less of a barrier to home ownership than in south Eastern England,’ the report says.
It also points out that the slower annual growth is largely due to price growth falling in London and other cities in southern England since 2016. Indeed, the annual growth rate has been negative for almost a year in the capital.
‘As the debate around Brexit intensifies there has been renewed focus on what this means for the housing market. It is clear from the transactional data that households are continuing to buy property at a steady rate and the impetus for growth in both activity and prices is focused in regional housing markets,’ the report points out.
‘It remains our view that housing market fundamentals explain the slowdown in London with Brexit uncertainty a compounding factor for the slowdown in London. We expect average prices across London to decline by 2% in 2019 with price falls concentrated in central London where annual growth is currently -4%. Prices continue to post small gains in the more affordable areas of outer London,’ it adds.
