The steep drop in price growth for homes across London is beginning to bottom out according to Hometrack, which says values will end 2017 some two to three per cent above those at the start of the year.
The latest Hometrack UK cities index reveals that house price growth in the 20 cities under review is running at 5.1 per cent per annum, down from 8.8 per cent back in May 2016.
In London the slowdown over the past 12 months has been even more dramatic with house price inflation rapidly decelerating from 14.0 per cent in May 2016 to 3.3 per cent in May 2017.
Despite the snap General Election, average prices across the 20 locations have increased by 3.5 per cent over the past three months. This is the highest quarterly rate of growth for four years.
This increase has been driven by above average growth in large regional cities such as Birmingham (3.8 per cent in those three months), Nottingham (also 3.8 per cent), Newcastle (3.5 per cent) and Manchester (3.3 per cent).
Apart from Oxford and Aberdeen, where prices have fallen in the last quarter by 0.6 per cent and 0.9 per cent respectively, all cities listed in the Index have registered higher growth in the last three months.
Birmingham and Manchester are the fastest growing cities over the past 12 months and are now firmly established as the engine for national house price growth, says Hometrack. Both cities have delivered a sustained and consistent level of house price growth in the last year and show little signs of slowing.
Over the remainder of 2017, Hometrack expects further house price growth in most major regional cities outside of London and the South East, including Birmingham and Manchester.
“We don’t expect year on year falls in our London index in 2017 but there are small price falls in localised markets, typically those with average prices of between £600,000 and £800,000. Given the uncertainty over the Brexit negotiations and the impact on the economy we believe that house prices will need to adjust further over the next one to three years to align with what demand is prepared to pay” cautions Richard Donnell, research and insight director at Hometrack.