House prices in UK cities continued to rise in September, although the pace of growth appears to be slowing.
Latest figures from Hometrack show that house price inflation in urban areas rose by 3.2 per cent in September, this is down from 3.8 per cent a year ago.
However, this average masks considerable regional variation. House prices in five UK cities are rising by more than 6 per cent a year. Liverpool is leading the way – with annual inflation at 6.9 per cent, following by Birmingham (6.5 per cent) and Leicester (6.4 per cent).
In contrast house prices fell by 4.4 per cent in Aberdeen over the past year, and have declined by 0.4 per cent in London. In total house prices fell in 29 local authorities that cover central London and the surrounding commuter belt.
This accounts for more than six out of 10 (63 per cent) of these London local authorities.
This is the seventh month that the annual rate of growth in the capital has been negative. However, Hometrack says that this is largely the result of quarterly price falls in the six months to January 2018. Since then the quarterly rate of growth has been positive and this has stabilise annual prices.
Other cities with slow – albeit positive hose price growth – include Cambridge, Bristol, Southampton, Newcastle and Portsmouth.
Taking a closer look at house prices in the capital, the survey states: “London’s housing market is large and diverse. Our analysis of prices changes by local authority finds that price falls are concentrated in inner areas of London, where affordability levels are most stretched and the gap between asking and sales prices is largest.”
The Hometrack survey says “modest house price increases” continue to be registered in outer areas of London and the surrounding commuter zones, where the average price of property is between £300,000 and £450,000 and affordability is less stretched than in central areas.
This house price survey shows that prices are fell over the past year in more 54 per cent of London postcodes. However, this figure is down from 59 per cent in June.
Legal & General Mortgage Club head of lender relationships Danny Belton says: “The north south divide has truly been turned on its head, as more and more first-time buyers and homemovers turn towards regional cities for better value for money.
“Strong economic hubs in the northern powerhouses are making bricks and mortar in these locations particularly attractive to younger generations here ,as well as buy-to-let landlords.”