Prime Centrum Blog

Liverpool top tier 1 city for Capital Growth at 7.8%

April 18, 2018

Published by: Izzet Olcusenler

Regional cities continue to register above average growth, city house price growth running at 5.2%

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 with overall HPI at 5.2%. London growth remains slow at +1%, and the greatest downward pressure on prices is being registered in inner London with prices falling across 42% of London postcodes.

Fig.1

Annual London growth rate slows to +1%

Fig.2 shows the proportion of London city postcodes registering positive and negative growth since 1996. The current coverage of markets registering negative growth is the highest since the global financial crisis. There have been other periods when parts of London have registered falling prices and these are explained by economic and other external factors.

Fig.2

Inner London the focal point for lower prices

The coverage of postcodes with negative growth has risen sharply since 2015. This is a result of tax changes impacting overseas and domestic investors and stretched affordability levels for owner occupiers that have been compounded by Brexit uncertainty. Sales volumes are first to be hit when demand weakens and housing turnover across London is down 17% since 2014. Prices are next to follow but the scale of current price falls remains modest. Most markets registering negative growth are experiencing annual price falls of between 0% and -5%.

We expect the number of local markets with falling house prices to grow further in the coming months as buyers accept lower prices to achieve sales. The net result will be a negative rate of headline price growth for London by the middle of 2018.

The greatest downward pressure on prices is being registered in inner London areas where prices are highest prices, yields lowest and with a greater share of discretionary buyers.

“The latest results confirm our view that house prices in London are set to drift lower in the next 2-3 years. In contrast, house price growth remains robust in the largest regional cities where similar analysis on rising and falling markets reveals no evidence of localised price falls.”

UK Cities House Price Index – published 26th March 2018

Article Sourced from: www.hometrack.com/uk/insight/uk-cities-house-price-index/february-2018-cities-index

Full credit and copy right belongs to www.hometrack.com/


Newsletter

Subscribe to receive updates about industry news and product launches.