Regional prices start to re-balance

Finally we are seeing the start of a re-balance in UK property pricing. Some of the larger UK regional cities have managed to claw back some ground on London's explosive gains.

 

Hometrack's UK Cities House Price Index for April shows for the first time since 2005 some large regional cities have managed to out-perform central London . 

12 larger regional cities,  Glasgow (7.6%), Manchester (6.8%) and Leeds (6.6%) have registered higher price rises year on year than parts of Central London with, Kensington & Chelsea and Hammersmith & Fulham rising 3.4% and 5.1% respectively.

Well it's a start, but Greater London is still got the march on, with the highest annual growth rates, with Newham strongest at 14.2%.

Homelet's data puts the average UK house price at £186,878.

Figure 1: City Level Summary, March 2015

Source: Hometrack UK Cities House Price Index

Richard Donnell, Director of Research at residential analysts Hometrack, said:

“House price growth is holding up better than expected as a result of a lack of new supply of homes for sale and record low mortgage rates attracting buyers into the market.

“Growth in London is still running in double digits and high capital growth rates in recent years have pushed down average loan to values in London, creating further capacity for additional borrowing for households that can pass tighter affordability tests for new lending.

“The pattern that we are currently seeing in regional cities is similar to what we witnessed in London from 2011 – 2013, except the majority of demand for housing in these cities is coming from domestic owner occupiers. It is not being boosted by international buyers or excess investor demand, as was the case in London, hence the more modest level of price rises compared to recent growth rates in the capital.

"As London’s first time buyers grapple over the affordability of the first rung on the property ladder, there is an opportunity to buy ahead of the curve. Boroughs such as Newham, Redbridge, Greenwich, and Barking and Dagenham offer that elusive mix of short term affordability and good capital growth in the longer term."

Read in full the Hometrack UK Cities House Price Index for March 2015

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