A 12-month slowdown in London house price growth has ‘bottomed out’, property analyst Hometrack said this morning.
It said annual house price inflation in London in July stood at 2.8%, up from 2.3% the previous month, fuelled by low transaction volumes and an absence of forced sellers.
Housing turnover across London has fallen by 17% since 2015.
Annual house price growth across UK cities generally stood at 5.3% compared with 7.4% in July 2016.
Growth has picked up in recent months on a faster rate of monthly price increases and continues to remain robust in regional cities.
Birmingham (8%), Manchester (7.1%) and Nottingham (6.9%) are the UK’s fastest growing cities.
Meanwhile Aberdeen remains the only UK city in the top 20 list to suffer house price falls (-3%). Average house prices in the city are now 16% lower than they were in December 2014 as the fall in the oil price impacted the local economy.
Hometrack said that in London, it expected low house price growth and low sales volumes for the foreseeable future.
Richard Donnell, research and insight director at Hometrack, said: “The London housing market has registered a rapid deceleration in house price growth since the start of 2016 as affordability pressures impact demand and the Brexit vote adversely affected housing market sentiment.
“Turnover is down 15% from the recent high recorded in 2015 and sellers are slow to accept downward adjustments in prices in the face of weaker, price sensitive demand.
“The downward pressure on prices is greatest in the most expensive parts of the capital where demand has been weaker since the end of 2014.
“These inner London markets are registering small year on year price falls of up to -2%. The downward pricing pressure is less evident in the lowest value markets of London which have registered above average growth and price inflation of over 3%.”
Table 1: City level summary, July 2017
|City||Average price||%yoy Jul-16||%yoy
|20 city index||£252,700||7.4%||5.3%||-2.1%|