The latest Hometrack UK Cities House Price Index revealed that house prices in London continue their slow growth.Hometrack provides residential property market insights, analytics, valuations and data services to over 400 partners including mortgage lenders, new home developers, investors, housing associations and local authorities. House Price Indices are based on the largest underlying data sample of any UK house price index. The 20 cities covered by the index contain 35 per cent of the UK housing stock by volume and 43 per cent of capital value.

London house price growth stalls

Average house prices in the capital increased by 0.5 per cent in the three months to September 2017 as the annual rate of growth reached 2.3 per cent on the back of lower turnover. However, with the general rate of Consumer Price Index inflation running at 3 per cent the index shows that in 85 per cent of the areas covered by the London City index house prices are now falling in real terms.

Richard Donnell, research and insight director at Hometrack said, “The London housing market is now firmly stuck in neutral. Stretched affordability, low yields for investors and concerns over Brexit and its impact on employment are weighing on market sentiment.“As a result, further house price falls in real terms across London are inevitable as prices re-align to what buyers are willing to spend. Consequently, nominal house price inflation in London looks set to remain between 1 per cent to 3 per cent over the next six to twelve months.”“However, house prices look likely to continue rising in regional cities as affordability remains attractive and values are growing off a low base.“The rate of growth is expected to moderate around its current level and will be tempered by economic and sentiment factors such as the squeeze on incomes from rising inflation and concerns over the economic outlook.

Cambridge and other southern cities prices fall flat

House price growth across many southern cities also remains flat. In Cambridge (2.3 per cent), Oxford (2.3 per cent) and Cardiff (2.4 per cent) the annual rate of growth is below the general rate of inflation.In contrast, the Hometrack index reveals that cities in Scotland have seen acceleration in house price growth.Housing sales in Scotland over the last quarter have increased by 20 per cent when compared to the previous 12 months (according to the HMRC). While London sits towards the foot of the 20-city index growth league table, Scotland’s capital Edinburgh now tops the list of UK cities ranked by price growth at 6.7 per cent.Manchester has dropped to second place with annual growth of 6.5 per cent followed by Birmingham at 5.9 per cent.____________________________________________

If you are a family relocating to or around the UK, or a relocation professional supporting families, you will have to juggle many factors when considering accommodation. One of the most important of these will be living within a comfortable travelling distance of your chosen school. The Relocate Guide to Education & Schools in the UK provides 170 pages of expert advice on UK education options and for a limited time only, you can access it for FREE here__________________________________________________

Prices in Scotland continue to improve with Glasgow leading growth

Glasgow has also registered a significant uptick in house price growth, rising from 1.8 per cent a year ago to 5.6 per cent today.Meanwhile, in Aberdeen house prices have been falling for the last 2.5 years but the year on year growth rate of – 1.8 per cent is the slowest rate of price falls for 2 years.Overall the headline rate of annual growth across UK cities is running at 4.9 per cent compared to 6 per cent twelve months ago.

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Further reading for residential property:

• London sees first home price drop since 2009 
• Estate & letting agents: help relocating families with our free UK Education Guide 
• Hometrack ups forecast for property price rise 

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Mortgage rate increase expected to affect growth

Mr Donnell said that a possible increase in interest rates and any knock-on effect for mortgages, is also likely to further temper demand.He continued, “A modest increase in mortgage rates will primarily impact sentiment and levels of market activity.“Mortgage rates remain low by historic standards and for the last three years, all homeowners buying with a mortgage have had to prove they can afford a much higher mortgage rate.“As a result, recent sales levels already reflect the ability of buyers to afford higher borrowing costs which should mean there is capacity for borrowers to absorb increased monthly repayments.”Relocate Global's Guide to Education & Schools in the UK 2017 is packed with expert education advice for those who are relocating and the professionals supporting them. Access your FREE digital copy here.For related news and features, visit our Residential Property section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory  

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