House price growth in London has fallen to its lowest level for 39 months, Hometrack has revealed.

The Hometrack UK Cities House Price Index shows annual values in London have fallen from 11.8% growth in 2015 to 7.6% in November at £483,300.

The top 20 cities in the UK have recorded annual growth of 7.7% to £243,200 while UK prices have grown 6.7% to £205.000.

Most of the transaction activity seems to be taking place outside of London and the South East, according to the index.

Leicester is expected to record a 7.3% increase in transactions compared with last year with Nottingham and Leeds set for a 6.7% increase.

In contrast, Hometrack is predicting a 6.7% drop in transactions in London, an 8.8% fall in Cambridge and the biggest decline in Aberdeen at 9.1%

Richard Donnell, insight director at Hometrack said: “In London and southern cities homeowners are facing the greatest affordability pressures, while the buoyant investor market has been impacted by fiscal changes, as well as tougher underwriting standards for mortgage borrowers.

“In larger regional UK cities, such as Birmingham and Manchester, affordability remains attractive and we believe there is room for further price growth over 2017.

“With this in mind, we predict that city level house price growth in 2017 will run slightly higher than the current consensus of 2-3%. However, this will largely be driven by the scale of the slowdown in London.”