UK city house price growth slows to 1.7%. Lowest growth since May 2012 as slowdown extends into cities across southern England. 17 cities within the 20 cities index are registering YOY growth. House price growth has been driven by rising levels of employment and income growth. Above average price inflation in regional cities with sales volumes up to 19% higher than 2015.
UK city house price growth over the past year:
- 2018: 2.4%
- 2019: 1.7%
London house price growth:
The annual rate of price inflation in London equates to 0.0%
Fastest growing cities
Liverpool, Leicester and Manchester are registering the fastest house price growth respectively at 5.7%, 5.3% and 5.1%
House price falls
London, Aberdeen and Oxford are registering house price falls, respectively at 0.0%, -0.4% and -0.6%
Housing cycle continues to unfold
The housing cycle continues to unfold driven by market fundamentals and the backdrop of Brexit uncertainty. Over the last 20 years, falling mortgage rates have provided an ongoing boost to buying power but with rates bottoming out at 2% in 2016 this trend has run its course. In addition to lower mortgage rates, the growth in house prices since 2008 has been driven by rising levels of employment and income growth. These factors have played out at different speeds across cities. Prices in some cities also received an additional boost from investor and overseas demand.
Over the last 3 years we have seen tax changes for investors and tighter mortgage regulations for homeowners shifting the dynamics of affordability. Together with higher prices, this has impacted demand for housing and the rate of house price growth. Low single digit house price growth is the medium-term outlook once cities have adjusted to the changed fundamentals.
Original content taken from Zoopla’s UK cities house price index report, March 2019.