House price growth across UK cities has reduced steadily across 2018 and currently stands at +2.7% when comparing December 2018 with December 2017, Zoopla’s UK Cities House Price Index has found.
The slowdown has been driven by price falls in London (-0.2%) and Cambridge, which has seen prices drop 3.8% annually while the rate of growth has slowed across Southern cities.
Richard Donnell, research and insight director at Zoopla, said: “Weaker growth in London, Cambridge and Aberdeen has been a large drag on the headline rate of house price growth across the UK cities index over the last year.
“House prices in London have been falling for almost 12 months while the rate of growth has slowed across cities in southern England, a result of growing affordability pressures, higher transaction costs and increased uncertainty.
“The strongest performing cities are outside south eastern England where affordability remains attractive and employment levels are rising.
“We expect current trends in price growth to continue across the rest of this year, with prices rising in line with earnings for much of the UK but lower growth and some house prices falls in London and the South.
“London will continue to register price falls, concentrated in inner London where prices have grown the most over the last decade. Prices continue to increase slowly in the more affordable outer and commuter areas of London.”
Northern, Midlands, Scottish and Welsh cities all lead the way for annual growth with Edinburgh’s average price up 6.8% annually; Liverpool up 6.3% and Birmingham, Nottingham and Cardiff all seeing prices increase by 5.9%.
There’s a clear North-South divide when it comes to house price growth. The 13 cities in its ‘20 cities index’ posting the highest growth are all located in the North, Scotland, the Midlands or Wales with Bristol in the South West the exception.
Other than Aberdeen, where the housing market has suffered due to oil prices, the ‘bottom seven’ cities are all in the South or East of England.
Some 10 cities have posted double digit growth since the 2016 vote, with Birmingham (pictured) (+16%) and Manchester (+15%) leading the charge.
In a reversal of fortunes, leaders in the broad recovery phase (London, Oxford and Cambridge) are now amongst the very poorest market performers post-Brexit vote.
Southern cities that outperformed during the broad recovery phase are now experiencing significantly decelerated growth, as economic and political uncertainty is more acutely felt here.