The headline rate of UK city house price growth has increased to +2.9% – ranging from +4.7% in Leicester to -5.5% in Aberdeen.
Large regional cities continue to post above average price growth on the back of rising demand and attractive affordability, supported by low mortgage rates. Weak price growth has been accompanied by a 10% to 25% drop in sales volumes as demand for housing has reduced.
The pace of annual price growth across regional cities is slowing compared to recent years. That said, cumulative house price growth since the start of 2017 has been greater than 15% in Edinburgh, Leicester, Manchester and Birmingham.
In contrast, house price growth across London, Oxford and Cambridge has been broadly flat with year on year price falls over 2018.
There is early evidence of firmer pricing in cities across southern England. Most notable in London where average prices have increased by 1% over the last year – highest rate of growth for 2 years.
The short-term outlook has been impacted by the start of the General Election campaign which will accelerate the seasonal end of year slowdown. After Christmas, and up until the end of March is when the interest in, and demand for homes takes-off. This explains why General Elections in the Spring tend to have more of an impact on housing market activity.
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