25 Nov

UK sees spread in housing recovery

UK sees spread in housing recovery

New figures show that house prices are recovering across the UK, although growth is slowing down.

According to the latest Hometrack index, the country's top 20 cities are reporting annual price rises of more than five per cent for the first time in ten years.

The Hometrack’s UK Cities House Price Index showed that the rate of house price growth may be slowing down, but it remains three times higher than the rise in UK earnings - equal to 1.3 per cent.

Overall, there does appear to be weaker demand, with the last quarter seeing average UK house prices rising by 0.6 per cent per month, compared to 1.1 per cent in the three months to May this year.

It is clear that many of the UK cities are now seeing some growth, with areas close to Glasgow, Edinburgh and Newcastle reporting a rise in interest as the recovery spreads.

A total of 11 cities have an average house price below that of the UK with Liverpool and Glasgow house prices still remaining 41 per cent lower than the norm across the whole of the UK.

In the capital, the average house price is now more than double the rest of the UK at 117 per cent - demonstrating the continued demand for homes in London.

Some areas have reported a downturn in activity despite recent strong performances. The cities of Oxford and Cambridge have seen respective price falls of 1.2 per cent and 2.3 per cent - compared to strong gains of 42 per cent and 52 per cent since 2010.

Richard Donnell, research director at Hometrack, said: "Despite the economic uncertainty, the slowdown in the UK housing market will be welcome news for policy makers who want to avoid a debt fuelled acceleration in house prices supported by record low mortgage rates.

"We expect the rate of house price growth to slow further in the run up to the year end," he added.

"However, there are still bright spots of activity amid reports of a wider national slowdown. For the first time since the financial crisis, an improved economic outlook has seen house prices in cities outside the south of England rising off a low base. By the end of the year, we could well see monthly house price growth in London slipping below that of some of major cities outside the South East."
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