City house price inflation slowed to 4.6% year-on-year in May, with prices falling across 20 local authorities in London, Hometrack’s House Price Index has found.
House price growth across the London City index is now 0.4% over the last 12 months. Prices are falling by up to -3.2% across almost half of the 46 local authority areas covered by the index.
With Edinburgh and Manchester continuing to register the highest rates of growth at 7.1% and 7.0%, respectively, the gap between London and other cities is set to narrow, mirroring the trend over 2002-2005.
Craig McKinlay, sales and marketing director, Kensington Mortgages, said: “Whilst headline figures show a slowdown in house price growth, which is no bad thing, if we look at individual cities outside of London annual growth is still accelerating.
“Northern cities like Birmingham, Manchester and Nottingham are powering the way, however, the similarity between these cities and the capital is a shortage of housing supply.
“The inconvenient truth is that the long-term solution for this problem will require considerable planning and commitment. Reaching housing targets for future generations still needs considerable investment and until this is done, prices will continue to creep up.”
House prices are falling in real terms across five cities – Belfast, Oxford, London, Cambridge and Aberdeen.