UK house prices: slowdown intensifies in major cities across Great Britain and Northern Ireland

The slowdown in house price growth is intensifying as unaffordability, tax changes and high stamp duty costs combine to reduce market activity.

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House price growth across Britain’s 20 largest cities is continuing to slow, according to the latest UK city house price index by property market analysts Hometrack.

With just a 0.9 per cent increase in prices over the last three months, the London housing market is currently the fourth slowest growing of the 20 cities tracked in the report - joint place with Oxford.

Leeds house prices have recorded the fastest rate of deceleration over the same time period, with prices down by -0.4 per cent in the last quarter, closely followed by Cambridge (-0.4 per cent) and Bournemouth (0.4 per cent).

“It’s really no surprise to see a softening in house price growth over the summer months. Nor should this easing in price inflation be considered a cause for concern, says Adrian Gill, Executive Director of Your Move & Reeds Rains. 

"The unsustainable rate at which property values have been rising has meant that many potential homebuyers have been priced out of the market – especially in areas like London and the South East. 

Forecasts for the capital’s growth have been slashed to just 6 per cent by the end of the year, and is on course for single digit growth by next spring, after years of double-digit growth have led to increased unaffordability.

Tax changes and high stamp duty costs have combined to reduce market activity.

City level summary, August 2016

City Current price %yoy
Aug 2016
% change
last quarter
Aberdeen £184,800 -6.7% 2.3%
Belfast £123,100 3.1% 1.2%
Birmingham £144,400 8.0% 2.1%
Bournemouth £263,500 6.2% 0.4%
Bristol £256,100 13.1% 1.7%
Cambridge £407,200 6.0% -0.4%
Cardiff £188,100 6.3% 0.3%
Edinburgh £203,800 3.3% 2.2%
Glasgow £113,900 4.5% 2.7%
Leeds £148,800 4.8% -0.8%
Leicester £151,400 5.6% 0.7%
Liverpool £114,300 7.2% 4.1%
London £475,700 10.4% 0.9%
Manchester £147,500 7.4% 1.9%
Newcastle £127,700 4.1% 1.7%
Nottingham £137,900 7.5% 1.8%
Oxford £409,800 8.1% 0.9%
Portsmouth £217,400 9.0% 1.5%
Sheffield £128,700 3.4% 1.3%
Southampton £214,200 7.7% 1.2%














Prime central London has been the hardest hit and the low rates of annual growth, currently standing at less than one per cent, look set to continue in areas such as Kensington and Chelsea, Hammersmith and Fulham.

Meanwhile, the highest rates of growth in London remain in the outer boroughs such as Barking and Dagenham, which has seen an increase of 16 per cent, and Havering, up 14.6 per cent, where house prices are around 30 per cent lower than the £475,000 London average.

Yet, sustained high-levels of growth over the last couple of years means these areas are also starting to become out of reach for buyers already priced out of central London. As such, demand is expected to fall and, as such, price growth is predicted to slow considerably. 

“Regional cities such as Glasgow, Liverpool, Birmingham and Edinburgh have all posted above average growth in the last three months as low mortgage rates and affordable property prices support growth," says Richard Donnell, Insight Director at Hometrack.

Liverpool and Glasgow, where average house prices of £114,000 are around half the price of the 20 city average (£239,400) and a quarter of the London median value, have recorded the fastest growth during this period, rising by 4.1 per cent and 2.7 per cent.

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