Manchester remains the number one UK property hotspot, after it was revealed today that property values in the city increased faster than any other in the country.
The average price of a home in Manchester increased by 8.4% compared with the same month a year earlier thanks to a surge in transactions, while Leicester and Birmingham saw the second joint highest annual house price growth last month, with a rise of 7.7%, as consumer confidence continues to improve.
In contrast, many cities in the south of England, including Bristol, Cambridge and Oxford, continued to register a sharp slowdown in property price growth, but it is London that has seen the steepest declaration in growth, on the back of weaker levels of demand from home owners and investors in the face of affordability constraints, tax changes and weaker market sentiment.
In the capital, 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.
By the end of this year, Hometrack estimate that home price growth in London will fall to between 2% and 3% and with the level of inflation increasing this means that the capital is set to see a real terms drop in property prices over 2017, which would be the first annual fall for six years.
Richard Donnell, insight director at Hometrack, said: “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.
“Outside southern England, we anticipate prices will continue to increase over 2017 as households take advantage of record low mortgage rates and an improving economic outlook.
“On paper there still remains material upside for prices in the Midlands, northern England and Scotland but much depends on how market sentiment is impacted by factors such as the general election, Brexit negotiations and rising inflation which will create a decline in real wage growth.”