The North-South divide in house prices is starting to shift in the UK, as the growth in southern cities starts to slow down whilst the north climbs to the top.
Glasgow has emerged as the city with the fastest growing quarterly house prices, with an increase of 5.2% in the three months to July, according to Hometrack’s monitor of the biggest 20 cities in the UK.
Liverpool (4.4%), Manchester and Nottingham (3.4%) also landed near the top of the leader board with higher growth rates.
London’s average growth was the lowest it’s been in 17 months at 2.1% in the last quarter, and Cambridge saw a fall of 1%, despite price houses booming for months in the city.
Outside of southern England, larger regional cities such as Leeds, Manchester, Birmingham and Cardiff are registering annual growth rates of 7-8% per annum.
Hometrack said house price growth for these regions show “no imminent slowdown”.
Overall, UK city house price inflation was 9.5% in July, down from 9.9% in June, with Bristol continuing to be the fastest growing city (14%), followed by London (11.7%).
Richard Donnell, research director for Hometrack, said: “In the absence of adverse economic trends impacting employment and mortgage rates, the near term outlook is for a continued slowdown in London towards mid-single digit growth.
"In contrast, northern regional cities will continue to register stable growth rates as households benefit from record low mortgages rates and affordability remains attractive."
Hometrack said that the slow growth in the capital is due to uncertainly following the Brexit vote causing weaker investor demand and financial pressures among buyers, which has impacted the demand for property. This also indicates why mortgage approvals by UK banks have fallen to their lowest level in July.
Mr Donnell said that estate agents in London who are struggling with lower sales volumes would look at pushing prices down to what buyers can afford to pay.
He added: "Past experience shows that this process can run for as long as six months and relies, in part, in how quickly sellers are willing to adjust to what buyers are prepared to pay."
