Price growth in key UK cities is continuing to grow with values up by an average of 3.5% in the last three months, the latest index figures show.
It was the highest quarterly rate since June 2014 and year on year the average price was up by 5.1%, slightly below the previous month’s 5.2%, according to the data from Hometrack.
This takes the average price in the 20 cities covered by the index to £250,200 but there is some regional variation and some locations have seen a considerable slowdown, such as London where growth has fallen from 13% to 3% in the last 12 months.
And while annual price growth was 8.8% in May 2016, half of the cities have faster growth than a year ago. Like London, Cambridge has also seen growth fall from 13% to 2% but all cities, with the exception of Oxford and Aberdeen, have registered higher prices in the last three months.
Larger regional cities recorded the highest price increases over the last quarter with Birmingham and Nottingham both up by 3.8%, Manchester up 3.3% and Newcastle up 3.5%. But the report points out that house prices in these and other cities continue to rise off a low base supported by a lack of housing for sale and low mortgage rates.
It also suggests that affordability and uncertainty are impacting demand in London which has the lowest annual growth for five years, although a rapid deceleration in price inflation is showing signs of bottoming out.
On current trends Hometrack says that it does not expect to see the London index to slip into negative year on year growth during 2017. ‘We predict annual growth to end the year at 2% to 3%,’ it adds.
However, some markets within London are registering annual price falls. Price rises are lowest in the highest value markets, where growth has been in single digits for the last year. Markets with prices between £600,000 and £800,000 are where small annual price falls are currently concentrated such as Islington and Hammersmith.
