City house price inflation exceeds 10%
UK city house price inflation grew to 10.1% in the year to November 2015, the Hometrack UK Cities House Price Index has found.
In the 12 months to November the fastest growth rate was recorded in London at 13.3%, equating to £52,900 based on average house prices in the city.
This is the second successive year prices have surged in the capital, as house price inflation was even higher at 14.7% in the year to November 2014.
The weakest growth rate was in Aberdeen, where house prices fell by 2% after a 12% increase in 2014 because of the steep fall in oil prices since mid-2014.
The city with the strongest year-on-year turnaround was Glasgow, where house price growth accelerated from 1.8% a year ago to 8% in November.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “House prices tend to decrease in the run up to Christmas and the New Year as a result of the falling demand for properties.
“Despite this, house prices are still up on the same period last year and are likely to climb further in 2016 as a result of the lack of supply and the constraints this has on the mortgage market.
“The new Stamp Duty rate for Buy-to-let properties, which is due to be implemented in March, is also likely to significantly increase demand in Q1 2016,which may act to widen the rift between supply and demand, driving up house prices further in the beginning of the year.”
Hometrack predicted city level house price growth to slow down to 7% in 2016 based on an interest rate rise occurring later in the year.
London growth should slow to 8% as affordability pressures and low investor demand take hold.