The latest Hometrack index reveals that city house price inflation has slowed to 5.4% as weak house price growth in London offsets above-average growth in large regional cities.

Edinburgh remains the fastest growing city (+8.2%) followed by Birmingham, Glasgow and Manchester where average prices are rising at over 7% per annum.

House prices are falling in nominal terms across three cities – Oxford, Cambridge and Aberdeen – a result of weakening demand, affordability and economic factors.

 

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UK city house price growth

Cities house price inflation – December

Price changes

 

London house price growth

The annual rate of house price growth across London is at 1.8%, due to tightening supply and lower turnover.

Fastest growing cities

Edinburgh, Birmingham and Glasgow are the UK’s fastest growing cities this month.

House price falls

House prices are falling in nominal terms across Oxford, Cambridge and Aberdeen this month.

Discounts to asking prices are narrowing

 

Listing price to sale price discount / premium

Analysis of ZPG listings data reveals how underlying market conditions continue to improve across cities outside south eastern England. The discounts sellers are accepting to achieve a sale are shrinking. The average discount over 2014 – 2016 was 3.2%, which has reduced to 2.9% in 2017 across England. A different system for selling homes in Scotland means sales prices are higher than listings prices.

City level summary

 

Rental market view

 

The lettings market has registered a wide variation in rental growth over the last decade with the strongest growth in London averaging 6% per annum. Growth has now slowed in London on weaker demand and stretched affordability. Rents are rising the most in regions where affordability is more attractive.

Average cost of rent per month (£)

Rental growth and gross yield by region