Figures from Hometrack’s June city index show that London house prices rose by 1.8 per cent in Q2 after fall of over 1 per cent over the previous six months, providing an annual growth rate of 0.7 per cent.
This reversal of fortunes is, according to Hometrack, a result of “greater realism” on the part of sellers, who have endured two years of repricing, evidenced by a narrowing of discounts from 5 per cent in Q1 to 4.8 per cent.
Throughout the rest of the 20 cities analysed, Manchester chalked up the highest annual growth, followed by Liverpool and then Birmingham at 7.7 per cent, 7.2 per cent, and 6.8 per cent, respectively.
Meanwhile, Aberdeen props up the bottom of the table, registering -2.8 per cent annual growth, followed by Cambridge at -0.2 per cent, and then London.
Hometrack insight director Richard Donnell says: “After two years of falling sales volumes and rising discounts to achieve a sale there are some signs of life returning to the London housing market. Discounts are finally starting to narrow as sellers become more realistic over pricing.”
Vida Homeloans director of sales Louisa Sedgwick adds: “Contrary to recent years, the gap between London property prices and other cities is narrowing, so it will be interesting to see how this trend develops in the second half of 2018.”
Legal & General Mortgage Club director Kevin Roberts comments: “House prices rising at more sustainable rates and 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 homemovers as well. Recent figures have shown the number of homemovers 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.
Mortgage Strategy reported on this shift in transaction activity type on 20 July.