Bristol, Oxford and Manchester are leading house price growth in UK cities, as momentum continues to shift from London to the country’s regional hotspots.
Cities such as Liverpool are now ranking above the UK capital, according to Hometrack’s latest UK Cities House Price Index, as prices rise off a lower base and affordability levels remain in line with their long-run average.
Bristol and Oxford are the top two fastest-growing city markets, with prices up 9.5 per cent and 9.2 per cent respectively. Manchester is the fastest growing city outside southern England where prices are up 8.3 per cent in the last year on an average price which is a third that of London. Southampton, Birmingham and Liverpool follow, with growth of 8 per cent, 7.4 per cent and 7.1 per cent respectively.
London, meanwhile, has dropped to eighth in Hometrack’s rankings with its lowest rate of growth (6.4 per cent) in 42 months.
Overall, UK city house price inflation is running at 6.9 per cent, compared to 7.9 per cent in January 2016. Hometrack attributes the slower rate of growth to a 0.2 per cent price fall in the third quarter of 2016.
“This is a consequence of weaker investor demand post the stamp duty changes and the impact of the Brexit vote on market activity,” says the report.
“The question is how much further house prices in regional cities could have to run were house prices to fully ‘price in’ low mortgage rates and the impact of continued economic growth and rising incomes,” adds Hometrack.
“In our view there is material upside for house prices in the coming years in many cities where the recovery since 2009 has been limited… The beneficiaries will be cities where investment in employment, infrastructure and regeneration will help stimulate the local economy.”
Liverpool leads UK city house price growth
13th February 2017
Liverpool was the number one city in the UK for house price growth in the final quarter of 2016, according to Hometrack.
The UK city house price index shows that city level price growth slowed from 7.7 per cent in 2015 to 7.2 per cent in 2016. Bristol registered the fastest annual growth of 9.6 per cent, with Manchester in second (8.9 per cent).
Manchester’s property price inflation is at a 12-year high, according to Hometrack, as demand runs ahead of supply, with the report forecasting that the city may overtake Britsol in Q1 2017. Liverpool, though, is an equally thriving city, topping quarter-on-quarter city house price growth. In the three months to the end of 2016, Liverpool property prices rose 3 per cent, just ahead of Aberdeen (2.9 per cent), Oxford (2.6 per cent) and Manchester (2.5 per cent).
London slipped to seventh in the annual rankings and 10th in the quarterly rankings, highlighting the switch of momentum from the UK capital to the country’s regional cities.
“Liverpool has grown at an unprecedented rate in recent years and this is set to continue over the short to medium term. There are parts of the city which never really benefitted from the early 2000s property boom; so many areas were left behind compared to neighboring Leeds & Manchester. Now Liverpool’s certainly making up for lost time and we’re seeing run down areas of the city really start to come to life,” says Oliver Ramsden, Founder & Director of Aspen Woolf.
London house price growth slows as affordability falls
28th November 2016
London’s house price growth is slowing, weighed down by worsening affordability levels.
The new Hometrack UK Cities House Price Index highlights the extent to which the capital’s property values have climbed in recent years, with the price to earnings ratio in London now at a record high of 14.1. London has the highest price to earnings ratio, due to lack of supply and strong demand fuelled by low mortgage rates, which have driven house prices up 86 per cent since 2009. London’s 14.1x is the highest in the UK, ahead of a national average of 6.5x and the lowest of 3.7x in Glasgow.
Cambridge and Oxford also have double digit price to earnings ratios, which are well ahead of the average over the last 12 years.
As affordability levels become stretched, fewer households can participate in the market which leads to reduced levels of turnover and a resulting slowdown in the rate of house price growth. Indeed, London’s annual house price growth is near to a three-year low (9 per cent), with Hometrack forecasting that will “slow to low single digits in the next 6-12 months as demand softens in the wake of a raft of fiscal policy changes aimed at overseas buyers and investors as well as concerns over the impact of Brexit on the economy”.
Instead, regional cities will now continue to drive house price growth. Bristol remains the fastest growing city, with prices up 10.6 per cent in the last year, although its price to earnings to ratio has risen to 9.2x, which is causing its growth to slow. Affordability across other cities is more in line with the long run average, with three cities boastings price to earnings ratios below the long run average: Glasgow, Liverpool and Newcastle. House price growth is starting to increase in all of them.
Liverpool and Glasgow lead UK city house price growth
23rd September 2016
Liverpool and Glasgow are leading house price growth in the UK’s cities, as the slowdown in the south of England continues.
The latest Hometrack UK Cities Index reveals house price growth fell to 8.2 per cent in August 2016. It also recorded its lowest level of quarterly growth for six months, thanks to the seasonal summer lull in activity, amplified by weaker demand after the Brexit vote and the April stamp duty change.
The city housing markets with the strongest underling rates of growth remain those that have some of the lowest prices and where the pick-up in prices has been running for the shortest period of time. In the last three months, Liverpool and Glasgow have recorded the fastest growth, where average house prices of £114,000 are more than half the price of the 20-city average (£239,400).
“Regional cities such as Glasgow, Liverpool, Birmingham and Edinburgh have all posted above average growth in the last three months as low mortgage rates and affordable property prices support growth,” says Richard Donnell, Insight Director at Hometrack. “Aberdeen has registered a small bounce back in house prices – after house prices registered a £20,000 fall since July 2015 – the rebound in growth reflects the fact that the recent fall in the oil price has now been priced into capital values.”
Bristol continues to register the fastest rate of annual growth of 13.1 per cent, followed by London (10.4 per cent), but growth in both cities is slowing. A similar trend is evident in most cities located in southern England including Cambridge, Oxford and Bournemouth, where annual growth has eased in the last few months. Cambridge registered the fastest deceleration in growth from an annual rate of 16 per cent in March 2016 to 6 per cent in August, which Hometrack attributes to affordability pressures.
London house price growth is on course to end 2016 at 6 per cent higher than 2015, but with a slower underlying rate of growth. Some areas, though, are still seeing prices climb.
“Despite the overall slowdown in London, it is dangerous to view the capital as a single housing market,” comments Donnell. “While many of the central boroughs have seen low rates of growth, in parts of outer London where house prices are 30 per cent lower than the London average, such as Barking and Dagenham and Havering, prices are rising by more than 15 per cent although these areas are starting to slow.”
Hometrack forecasts London will see low single digit growth in prices by spring 2017, as high prices and the stamp duty changes combine to reduce market activity in the face of rising supply.
Bristol leads UK house price growth as London slows
26th August 2016
Bristol is leading house price growth in UK cities, as London suffers its slowest growth in a quarter.
Bristol house prices rose 14 per cent year-on-year in July, according to Hometrack’s latest cities house price index, ahead of London at 11.7 per cent. Indeed, London registered its slowest growth in a quarter for 17 months, due to weak demand and rising supply. As a result of that marked slowdown, the annual rate of house price inflation across the 20 cities monitored by Hometrack has started to slow – a shift in momentum, following 12 successive months of rising house price inflation. Headline UK city house price inflation was 9.5 per cent in July, down from 9.9 per cent in June.
However, house price growth in large regional cities outside southern England continues to hold steady at 7 to 8 per cent per annum, with no sign of an imminent slowdown.
Over the last quarter, the highest rate of growth have been registered in lower value, higher yielding cities where prices are rising off a lower base – Glasgow (5.2 per cent), Liverpool (4.4 per cent), Manchester and Nottingham (3.4 per cent).
Average growth in the last quarter for London was 2.1 per cent, as weaker investor demand, affordability pressures and Brexit uncertainty impact demand at the same time as supply has risen.
“This is still an annualised rate of 8 per cent+ but the signs are growth will slow further over the coming months,” says Hometrack.
Cambridge also posted a 1 per cent price fall over the last quarter with prices more sensitive to weaker demand although the annual rate of growth is still running at 7.1 per cent.
“We continue to believe that turnover will register the brunt of the slowdown in London,” says the report. “In the face of lower sales volumes agents will look to re-price stock in line with what buyers are prepared, and can afford, to pay. Past experience shows that this process can run for as long as 6 months and relies, in part, in how quickly sellers are willing to adjust to what buyers are prepared to pay.”
Photo: Harshil Shah
Cambridge takes lead as city house price growth continues
31st May 2016
Cambridge has taken the lead in the house price race, as UK cities see property values increase by double-digits.
Cambridge enjoyed triumph over Oxford in the annual boat race earlier this year for the third time in a row. Now, Cambridge has raced ahead of its university rival in the house price stakes too: according to Hometrack’s latest City House Price Index, Cambridge is now leading national growth, with prices up 15.8 per cent year-on-year in April 2016, ahead of London (14.4 per cent) and Bristol (13.8 per cent) – and lengths ahead of 10th place Oxford, where prices rose 7.1 per cent.
Overall, though, all cities are enjoying a strong quarter, with average annual growth at 10.4 per cent compared to 6.6 per cent 12 months ago, when growth slowed in the face of uncertainty surrounding the 2015 General Election.
Now, a similar headwind is in the air, thanks to the looming UK referendum on remaining in the European Union.
“A vote to leave is likely to hit the London market hardest, while a vote to remain will have the greatest benefit for housing markets in regional cities which have the greatest upside,” predicts Hometrack.
“With the EU vote looming our long run analysis shows sales volumes to be more responsive to external shocks than prices.”
House price growth in UK cities hits 18-month high
31st March 2016
House prices in UK cities are growing at their fastest rate in 18 months, a rapid increase that Hometrack has labelled “notable” and “unseasonal”.
The uptick in price growth is fuelled by the rush of buyers to beat the 1st April deadline for the 3 per cent Stamp Duty surcharge on additional home purchases in the UK, including both second homes and buy-to-let investments.
As a result, overall city level house price inflation increased to 11 per cent in February 2016, according to Hometrack’s latest city house price index, significantly higher than the 8.1 per cent recorded a year ago.
Regional cities continue to lead growth in the UK, with five cities enjoying their highest rate of growth for up to 11 years.
Portsmouth and Leeds top the house price growth chart, with values up much faster than earnings, at between 8 per cent and 9 per cent per annum. Nottingham, Birmingham and Glasgow complete the top five, with growth of above 6 per cent.
“Increased demand from existing home owners in cities where the economic recovery has been less pronounced,” notes Hometrack, “an important underlying theme given that the majority of housing sales (80 per cent) continue be driven by home owners.”
16 of the 20 cities covered by the index have registered an increase in the annual rate of house price growth increase in the last year.
Large regional cities enjoy strong price growth
20th November 2015
Large regional cities in the UK are enjoying strong price growth, as rising demand pushes prices up at the fastest rate since 2007.
Glasgow, Manchester and Liverpool are registering the highest rates of annual house price growth since 2007, according to Hometrack’s latest cities index, with interest from buyers boosted by improving consumer confidence and low mortgage rates.
Glasgow house prices currently average £110,000, less than half the £229,300 average price across all the 20 cities measured by the Hometrack UK Cities index. Nonetheless, growth is strong: house prices in the city stopped falling three years ago and have since risen by 13 per cent. In the last 12 months alone, they rose 8.3 per cent, which is the highest rate of annual growth across the city since August 2007.
In a similar vein, Manchester house prices have been recovering since 2012 and average house prices have risen by 17 per cent over this time to £141,200. In the last 12 months house prices across Manchester have grown by 7 per cent, the highest rate of growth since July 2007.
Liverpool has registered the weakest house price performance of all the British cities covered by the index since the global financial crisis. House prices declined between 2007 and early 2013 and have since increased by just 10.5 per cent. In the last 12 months, year-on-year growth has risen to 5.1 per cent, the highest since August 2007. Despite this modest recovery, the average price of £109,800 is still 13 per cent lower than the 2007 peak.
Overall, the site’s Cities Index records annual house price growth of 9.4 per cent in urban areas, faster than the 7.1 per cent UK-wide growth rate. City level house price inflation looks set to reach 10 per cent by the year end, predicts Hometrack.
“The outlook for the next 12 to 18 months will be a balance between how much the high growth London markets will slow and how much more momentum will come from cities where the housing recovery is still in its infancy,” explains the site.Google+