House price growth in the major northern cities such as Leeds is showing no sign of slowing down, according to leading property market analysts, despite a “marked slowdown” in London and parts of the South East.
In its analysis of 20 UK cities, Hometrack says annual house price growth nationwide is starting to plateau, largely due to a deceleration in the capital and other high value cities across the south of England.
In the three months to July, house prices in London rose by just 2.1 per cent, the lowest quarterly rate since February 2015, while Bristol saw growth over the last three months slow to 2.6 per cent from a recent high of 5.0 per cent in May 2016.
But the same trend has not been seen in the major cities of northern England, where house price inflation shows no sign of slowing, according to Hometrack.
Richard Donnell, Insight Director at Hometrack, said seasonal factors could not be blamed for the slowdown in London, instead blaming “weaker investor demand, affordability pressures and Brexit uncertainty impact demand at the same time as supply has risen”.
He suggested that house price growth would continue to slow in the capital for the rest of 2016.
He added: “In contrast, northern regional cities will continue to register stable growth rates as households’ benefit from record low mortgages rates and affordability remains attractive.”
The rate of annual house price growth in Leeds, Manchester, Birmingham, Liverpool and Nottingham continues to rise by between seven per cent and nine per cent.
According to the Hometrack UK Cities House Price Index, values in Leeds were up 7.3 per cent in July compared with the previous year, and up by 8.7 per cent over three months compared with the same period in 2015.
House prices rose by 2.1 per cent over three months, giving an average house value in the city of £151,500. This compared with a national rate of 2.6 per cent in the last quarter.
In Sheffield, house prices were up by 4.1 per cent in July, year-on-year, though over three months the growth rate was 11.7 per cent compared with the same period in 2015.
Across the UK, the year-on-year growth rate in July was 8.1 per cent, compared with the rate of 4.8 per cent seen 12 months ago.
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