Manchester once again tops annual city house price growth

Manchester and Liverpool lead property market growth in the latest index covering 20 cities across the country with prices up 7.4% and 7.2% in the 12 months to the end of June.

Overall, prices increased by 4.6% with Birmingham, Leicester and Cardiff also seeing strong growth of 6.8%, 6.5% and 6% respectively. But Edinburgh, which has been leading the index fell back to 12th place with annual growth dropping to 3.9%.

At the other end of the Hometrack 20 cities index Aberdeen continues to trail with annual price growth down by 2.8%. Cambridge also registered a fall with prices down 0.2% while in London they rose marginally by 0.7%.

The index report suggests that sellers are becoming more realistic in London when it comes to pricing with the three month growth rate increasing while discounts from asking prices in London are narrowing for first time in two years.

Manchester has the lowest level of price discounting at 2.2% along with Bristol and the report also reveals that house prices are falling in real terms across six cities, that is growth below the 2.4% rate of consumer price inflation in Southampton, Oxford, Belfast, London, Cambridge and Aberdeen.

The report points out that the level of discounting is growing in southern England. Southampton, for example, is registering annual house price growth of just 2.1% while the level of discounting has increased from 2% to almost 4% since the third quarter of 2017.

The report also points out that house price inflation in Birmingham has moderated over the last year and the gap between asking and achieved prices has started to plateau, standing at 2.8%. ‘We expect a continued moderation in the rate of house price inflation over the next 12 months,’ it adds.

It explains that there are challenges ahead for the housing market, most notably a potential interest rate rise and continued uncertainty relating to the Brexit negotiations. ‘We expect current trends to continue into the second half of 2018,’ it concludes.

The figures suggests that house prices are rising at a more sustainable rate, according to Kevin Roberts, director of the Legal & General Mortgage Club.

Kevin Roberts said:

‘Improving product choice on the mortgage market are improving the opportunities for first time buyers to step on the housing ladder, but for many people it still remains a struggle.

‘While the focus is often rightly on first time buyers, we shouldn’t forget the plight of home movers as well. Recent figures have shown the number of home movers has fallen behind those of first time buyers for the first time since 1995, as the cost of moving and high price of property convince many to stay put. A boost to housing supply remains critical and it’s essential that the Government continues to focus on meeting the target of 300,000 new homes a year.’

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