Manchester remains the number one UK property hotspot, after it was recently revealed that house price growth in the city increased faster than any other in the country.
The average price of a home in Manchester increased by 8.4% in April compared with the same month a year earlier thanks to a surge in transactions, while Leicester and Birmingham saw the seconded highest annual house price growth of 7.7%, a strong indicator of improving consumer confidence.
By contrast, the south of England saw a slowdown in property price growth including areas such as Bristol, Cambridge and Oxford. However, London seems to be worse affected with the steepest downturn in growth. The capital is seeing lower levels of demand from home owners and investors in the face of affordability constraints and tax changes.
In London, property price growth has fallen from 13% a year ago to just 3.5% in April 2017, dragging down the average across 20 of the largest UK cities to only 5.3%, a significant decline from the 8.7% registered in April 2016, according to the latest Hometrack UK Cities House Price Index.
Richard Donnell, insight director at Hometrack, commented: “Looking ahead we expect current trends to continue with house price growth losing momentum in cities across southern England. This is due to record high housing affordability and subsequently a large numbers of households being priced out of the market.”
By the end of this year, Hometrack estimates that house price growth in London will fall even lower and with inflation increasing, the capital could see a real term drop in property prices over 2017, which would be the first annual fall for six years.
In the Midlands and North of England, there is an anticipation that prices will continue to increase over 2017 as households take advantage of record low mortgage rates and an improving economic outlook. However, the impact of the rising inflation, the results of the snap election and impending Brexit negotiations could affect market sentiment.
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