Two cities in the east Midlands have had the fastest growth in house price inflation in the last year. Nottingham registered house price growth of 7.5 percent, closely followed by Leicester on 6.6 percent.
However, house price growth in London is now registering negative figures, thanks to flat prices across the capital.
The UK Cities House Price Index by Hometrack revealed that UK city house price growth is on average 4.2 percent across the last 12 months, ranging from Nottingham’s positive 7.5 percent to Aberdeen’s -4.0 percent. London dropped to 0.1 percent.
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Cities lagging behind 2008 values
Measuring house price growth in the decade since the financial crisis, Hometrack revealed that three cities now have property prices below those of 2008 while four cities boast property prices more than 50 percent higher than in the same year.
According to the report: “Weaker market sentiment and affordability pressures in southern England are limiting the willingness of buyers to bid up the cost of housing.”
In its analysis of house price growth since 2008, Hometrack noted that Belfast (28 percent), Aberdeen (3 percent) and Liverpool (1 percent) still have prices below their level of 10 years ago.
Average prices in Glasgow and Newcastle are within 5 percent of where they were a decado ago.
In contrast, Cambridge’s average house prices are an extraordinary 70 percent higher than they were in 2008. In London, they are up by 65 percent, in Oxford by 55 percent and in Bristol by 53 percent.
Closing the gap
That leap in prices has had both positive and negative effects, as Hometrack noted: “Stronger economic growth, a broader base of demand for housing and limited availability of homes for sale are behind this stronger performance. However, these cities are now registering some of the weakest levels of growth as a result of low yields and stretched affordability.”
Projecting ahead a decade, Hometrack said it expects underperforming cities to close the gap to the top performers.
Its report added: “The timing and scale of this process will rely on economic growth and job creation in these cities and the trajectory of mortgage rates.”
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