UK City house price inflation reached 2.9 per cent in October 2019, as prices start to firm up in London and Southern England, according to the latest UK Cities House Price Index from Hometrack.
Large regional cities continued to post above-average price growth on the back of rising demand and attractive affordability, supported by low mortgage rates. London is experiencing its highest rate of growth for 2 years and follows a period of modest price falls. This trend comes as a relief for investors in the housing market, as the UK capital remains resilient despite Brexit-related uncertainty impacting the property market.
London has been through a 3-year repricing process accompanied by modest price falls – in contrast, average values have increased by up to 15 per cent in large regional cities since the start of 2017. The proportion of London markets experiencing monthly price falls is the lowest level for over 2 years - a result of reduced supply, increased sales and more realistic asking prices. The strong fundamentals of the London property market are delivering healthy returns to investors.
Cities that witnessed highest house price growth in October were Leicester (4.7 per cent), Manchester (4.6 per cent), Liverpool (4.1 per cent), Edinburgh and Belfast (4 per cent), Birmingham (3.5 per cent), Nottingham and Leeds (3.1 per cent).
Tight supply and more sales support London prices: There are several factors behind this shift in momentum. First is a decline in available supply – Zoopla listings data shows that the number of new homes listed for sale per agency branch this year is lower than over the last 4 years. This has increased scarcity for those looking to buy a home, a trend that has been developing for the last 12 months and which has been accelerated by the announcement of the election