The latest Hometrack index reveals that city house prices have grown by 4.6% over the last year.
Edinburgh and Manchester are registering the highest rates of growth at 7.1% and 7.0% respectively. However house prices are falling in real terms across five cities this month – Belfast, Oxford, London, Cambridge and Aberdeen.
Over the next 12 – 24 months, we expect to see the price gap between London and other cities to narrow further, mirroring the trend over 2002 – 2005.
House price growth across the London City index is now 0.4% over the last 12 months.
Edinburgh is the fastest growing city this month, followed by Manchester and Bournemouth.
House prices in Aberdeen are falling by -5.7% per annum, and in real terms across Cambridge and London.
With house prices in regional cities rising faster than London, the gap between London and the rest is narrowing. This graph shows the ‘price relative’ between London and selected other cities – showing the ratio of the city to London as the base at 100%. It shows how, over the housing cycle, the price relative between London and other cities expands and contracts.