Although the highly publicised price falls in the capital share some of the blame, Cambridge saw prices drop 3.8% annually and the rate of growth has slowed across most Southern cities. Northern, Midlands, Scottish and Welsh cities all lead the way for annual growth with Edinburgh’s average price up 6.8% annually; Liverpool is up 6.3% and Birmingham, Nottingham and Cardiff have all seen prices increase 5.9%.
Zoopla’s latest UK cities index shows 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 (Bristol in the South West is 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.
Ten cities have posted double digit growth since the 2016 vote, with Birmingham (+16%) and Manchester (+15%) leading the charge. All cities posting double digit growth since 2016 are Northern, Scottish, and Welsh or located in the Midlands (Bristol is the exception).
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 out-performed during the broad recovery phase are now experiencing significantly decelerated growth, as economic and political uncertainty is more acutely felt here.
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.”
