The impact on the UK economy of a hard or ‘no deal’ Brexit, and the knock-on impact for the housing market, has been a topic of much debate recently. Despite uncertainty around Brexit compounding the market slow down in London, the latest analysis from Hometrack, looking at income available to buy indicates there is further scope for price growth in the most affordable cities, where prices are currently rising fastest.
UK city house price inflation is running at 3.9%, up on 3.6% a year ago and there has been an increase in the quarterly and annual rate of growth in recent months. According to Hometrack, this is primarily a result of an acceleration in house price growth in the most affordable cities.
Liverpool has the fastest rising property prices
Liverpool is the fastest growing city where the annual rate of inflation is 7.5% followed by Glasgow (7.2%) and Nottingham (6.9%). These cities are among the most affordable and average prices are only just returning to the levels last seen in 2007. Liverpool (-4%) is one of only four cities where house prices are still below the high’s recorded in 2007 at the end of the last property cycle. The others are Newcastle (-2%), Aberdeen (-4%), and Belfast (-41%).
House prices are falling in three cities due to economic and affordability pressures – Aberdeen (-3.8%), London (-0.3%) and Cambridge (-0.1%). Despite the recent increase in the oil price, average house prices in Aberdeen continue to decline and have been falling for exactly three years. From a recent high of £198,000 in December 2014, house prices have fallen back to £164,000, a decline of 17%, wiping out similar sized gains made between 2012 and 2014. This highlights how local economic shocks can result in price falls, even though house prices are growing nationally.