Hometrack has reported that the divergence in house price growth between southern England and regional cities continued in February with overall house price inflation at 5.2%.
London growth remains slow at +1%, and the greatest downward pressure on prices is being registered in inner London.
UK city house price inflation was 5.2% in the 12 months to February 2018 compared to 4.0% a year ago. The divergence in house price growth between southern England and regional cities continues.
Half of the 20 cities covered by the index are registering higher annual growth than a year ago. Five cities are registering growth of more than 7% per annum: Edinburgh, Liverpool, Leicester, Birmingham and Manchester.
Hometrack found that 10 cities are growing at a slower rate than a year ago with the greatest slowdown in Bristol, Southampton and London as affordability pressures impact market activity and the upward pressure on house prices.
The headline rate of growth across London has slowed to just 1%, down from 4.3% a year ago. This is the lowest annual rate of growth since August 2011. Over the last three months average prices have increased by just 0.4%, well down on 5% growth recorded per quarter recorded in 2014.
Danny Belton, head of lender relationships at Legal & General Mortgage Club, said: “Despite the naysayers who talk of a slowdown in the housing market, we need to remember that property prices are still on the rise and importantly at a more sustainable rate that benefits the new generation of first time buyers looking to get onto the property ladder. We’re no longer seeing the stratospheric rises in property prices of recent years that have locked many new buyers out of the housing market, and that should be welcomed. At the same time, the mortgage market remains in a strong position, with thousands of buyers remortgaging and taking advantage of near-record low mortgage rates.
“However, this doesn’t mean the housing crisis has been resolved. More can always be done to boost property transactions and help buyers make their first or next step on the ladder – the fundamental issue remains supply and it’s vital that the Government continues to work with housebuilders to deliver the thousands of new homes our country needs.”