The UK cities house price index from Hometrack shows growth in the north is taking the lead as London trails after Brexit uncertainty.

Hometrack have produced their latest index showing a shift in house price growth from the southern to northern England as London’s registers the slowest growth in a quarter for 17 months with weak demand and rising supply.

Glasgow is the city with the highest quarterly growth of 5.2%, followed by Oxford on 4.7%, Liverpool with 4.4%, Nottingham and Manchester on 3.4%.

Outside of southern England, house price growth in large regional cities continues at a steady 7% to 8% per annum with no sign of an imminent slowdown.

For home movers wanting to trade up when prices are rising, they may find their next property is more expensive which means they need a larger deposit or mortgage.

Cambridge and London losing momentum

Of the twenty cities in the Hometrack index only Cambridge posted a 1% price drop in the last quarter as house prices are more sensitive to weaker demand although the annual rate of growth is still running at 7.1%.

The UK cities house price index from Hometrack shows the top twenty cities growth over the last quarter to June 2016:

City	Average House Prices	Quarterly Changes
Glasgow	£115,200	5.2%
Oxford	£416,000	4.7%
Liverpool	£113,400	4.4%
Nottingham	£137,900	3.4%
Manchester	£147,700	3.4%
Edinburgh	£203,600	3.1%
Leicester	£152,700	3.0%
Newcastle	£127,400	2.8%
Sheffield	£129,600	2.8%
Bristol	£254,500	2.6%
Portsmouth	£216,200	2.2%
Birmingham	£143,300	2.1%
London	£476,600	2.1%
Aberdeen	£184,600	2.1%
Leeds	£151,500	2.1%
Southampton	£213,300	1.7%
Bournemouth	£262,600	1.7%
Belfast	£122,700	0.1%
Cambridge	£404,500	-1.0%

London continues to show a marked slowdown in property price growth at 2.1% for the last quarter as affordability pressures and Brexit uncertainty impact demand.

On average over the last year house prices for the twenty city index have increased by an average 9.5% and the top three cities are Bristol with 14.0%, London on 11.7% and Oxford up 10.1%.

The continued double figure rise in house prices means first time buyers and home movers in these cities would require a significantly larger deposit or higher earnings to purchase to buy.

This is in contrast to homeowners where rising house prices allows remortgage buyers to release capital for home improvements such as a new kitchen, bathroom or extension.

For buy-to-let landlords with existing properties the rise in house prices creates more equity which they can benefit from if they sell in the future.

Post Brexit outlook

For the year so far the twenty city index has shown stable house price inflation with the rolling quarterly growth rising from 2.2% in February to 3.2% in July and over the year house prices increased from 8.2% to 9.5% for the same period.

Richard Donnell, the research director for Hometrack said official data from HMRC on housing sales to July shows an 8% fall in property sales volume on the year.

The greatest divergence in new supply and sales remains in London and data suggests sales volumes are continuing to hold up outside London and southern England.

In the near term the outlook is for a continued slowdown in London towards mid-single digit growth and stable growth rates in regional cities due to record low mortgage rates where affordability remains attractive.

According to Mr Donnell, in London lower sales volumes will force a re-price of properties in line with what buyers are prepared or can afford to pay.

Their past experience shows that this process can run for as long as 6 months and relies on how quickly sellers are willing to adjust to what buyers are prepared to pay.

Difficulties in downsizing means older equity release buyers will stay in their home accessing wealth in their property with a lifetime mortgage to help maintain their standard of living as costs rise.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to pay for care at home or reduce inheritance tax owed by your beneficiaries.

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