The property price slowdown is more than just a London phenomenon...
The slowdown in property prices is more than just a London phenomenon, according to new research from the Hometrack UK Cities House Price Index. Although London tops the chart with 14.7% year-on-year growth, there are signs that its market has plateaued and is set to slow in 2015, with growth decelerating significantly in the second half of 2014.
Richard Donnell, director of research at Hometrack, said: “House price growth at a city level looks set to converge further in the first half of 2015 as high growth markets continue to slow and lower growth markets start to see growth plateau. Pent-up demand has fed back into the market in the last 2 years, supported by record low mortgage rates, but mortgage approvals have weakened in the last five months with a knock on impact on house price growth. Low mortgage rates are making housing look affordable but it is the willingness and ability of households to borrow, against the background of greater mortgage regulation, which will most influence the housing market in 2015.”
Eleven cities recorded an acceleration in growth during the second half of 2014
The cities that registered an acceleration in house price inflation over the second half of 2014 were led by Edinburgh, Aberdeen and Glasgow, where demand for housing was boosted by the referendum result. Newcastle, Leicester and Liverpool have also seen growth since June, rising off a low base, with house prices in these cities 9%, 2% and 15% below their 2007 peaks.
Oxford, London, Cambridge and Bristol have all registered a slowdown in the rate of growth over 2014 H2 off a high, double digit base. Other cities registering a slowdown include Bournemouth, Belfast and Leeds, showing that slower house price growth is more than a solely London phenomenon. Slower growth in housing demand, tougher mortgage checks and affordability factors are behind the slowdown in these cities where house prices have bounced by as much as 55% from their 2009 lows in recent years.