Photo: Walt Jabsco
London has been the leader in the UK house price race during recent years, as demand from overseas and returning domestic buyers drove property values up faster than the rest of the UK. Now, though Bristol is stealing the show, with values up 0.9 per cent per month on average in the three months to October 2014 – ahead of London (0.7 per cent).
Figures from Hometrack highlight how widespread the UK property recovery has become: the pick up in house price growth over the last 18 months has now spread to all 20 cities covered by Hometrack’s index, with each registering house price growth of over 5 per cent per annum – the first time in a decade that all 20 cities have simultaneously registered growth of more than 5 per cent per annum.
On a yearly basis, London and Bristol are registering the highest rates of growth at 17.3 per cent and 13.2 per cent respectively. Glasgow and Liverpool are registering the slowest annual growth at 5.5 per cent per annum against a UK average of 9.2 per cent. Cambridge and Portsmouth also saw growth above the average rate, with prices rises 12.2 per cent and 9.4 per cent respectively.
Cities with the lowest rate of growth in the spring have seen the strongest pick-up as prices rise off a low base, e.g. Glasgow, Edinburgh and Newcastle.
While the trend has been a steady acceleration in house price growth, though, there are clear signs that momentum is starting to slow. In the three months to May 2014, the average monthly increase in UK house prices was 1 per cent. In the three months to October 2014 this has now slowed to 0.6 per cent, as demand from cautious buyers softens.
“There are a number of factors at play,” explains Hometrack’s report. “First there is less pent-up demand for housing than 2 years ago. Those households that wanted to move and were in a financial position to do so are likely to have done so.”
Second, explains the report, the introduction of loan to income caps and MMR limitations in lending have helped to constrain demand in the run-up to 2015, when interest rates are expected to rise.
“The emerging slowdown in the housing market will be welcome news for policy makers who want to avoid a debt fuelled acceleration in house prices supported by record low mortgage rates,” says Hometrack. “We expect the rate of house price growth to slow further in the run up to the year end.”
Source: The Movechannel