Residential property prices in key UK cities have proved to be resilient during the opening half of 2017, according to the most recent data released by Hometrack.
Results from the report show that there was growth of 5.1% in the opening six months of 2017 in these key locations.
Key Rises and Falls
This increase in values takes the average price of a property in the 20 cities covered by the index to £252,400. However, there is regional variation, with some locations seeing substantial slowdowns.
London for example has seen annual price growth fall from 10.1% to just 2.6%.
13 of the 20 cities analysed have a lower annual growth rate than at the same period last year, but London saw the most dramatic year-on-year slowdown. This was due to affordability pressures, coupled with political uncertainty surrounding buyer sentiment.
This slowdown is showing signs of flattening out, with average prices in London up by 1.7% during the second quarter of 2017.
Apart from London, other cities, such as Bristol, Oxford and Cambridge, have also seen a slowdown in the rate of house price growth – with falls between 6%-10% over the last year.
The table below shows how annual growth his changed in the 20 key cities covered by the Hometrack index over the last year:
|% growth 2017H1|
|20 city index||£252,400||5.1%||5.0%|
7 cities covered by the Index saw a larger rate of house price inflation, led by rises in Birmingham. Prices here are up by 7.8% year-on-year, while some regional cities, such as Manchester, continue to register robust house price growth of more than 6%.
Richard Donnell, Research and Insight Director at Hometrack, noted the importance of Brexit on the figures: ‘Despite a material slowdown in the rate of house price growth in south eastern England, the headline rate of city house price inflation is holding up, despite the squeeze on real incomes and uncertainty around Brexit.’
‘The Brexit impact was greatest over the second half of 2016 but house price growth has picked up over the last six months. This is consistent with an 11% increase in the number of home purchase mortgages, which is also 5% higher than the five-year average.’
Concluding, Mr Donnell said: ‘In London, the Brexit vote has had a greater impact on buyer sentiment and combined with affordability issues has led to a 10% reduction in the annual growth rate over the last 12 months. However, although house price inflation has fallen sharply in the capital it is starting to flatten out and the rate of growth is likely to avoid year on year price falls in the coming months.’