As far as the UK’s key cities are concerned, property prices grew by 6.4% in the year to February 2017. This may be down by 7.8% across the country but the average is being hampered by a major slowdown in London’s growth figures.
With the capital seeing a decline in property growth; the leading UK property markets can now be found within the regional cities across the nation. Manchester is leading the way at 8.8% where London’s annual growth has tumbled to 5.6% and fallen to tenth in the list of the top 20 cities for property growth.
Aside of Manchester, more strong growth has been noted in areas such as Portsmouth (8.1%), Bristol (8%), Glasgow (7.7%) and Birmingham at 7.4% alongside its Midland neighbour Leicester at 7.2%. Sadly, Aberdeen is a lonely figure as the only city to see decline in the UK with worrying figures of 5.9% year on year.
The overall impression is that affordability remains a major issue for the growth rates in the South of England. Growth has been stimulated in Manchester by a strong supply/demand balance in favour of strong demand – cities in the South cannot measure up to this level of transaction demand despite growing supply levels.
The least affordable cities in the UK have experienced a tumultuous time over the last three years as the turnover of property has been relatively flat and, in some instances, falling. Brexit and lowered investment demand has pushed affordability to its limits in the South and recovery seems a long way off.
Whereas, in the more regional cities of the UK, affordability is becoming less of an issue as the housing market begins to recover in its earliest stages for many areas. Lowered prices are seeing transaction numbers increase and the burgeoning demand is slimming property stock down its bare bones – increased demand against low supply will always push prices up.
As an average; price growth is expected to remain relatively flat across 2017 and the number of transactions will no doubt stagnate in tandem due to a market flooded with less expensive property but no buyers as such.
The higher valued cities in the UK will likely see sales volumes decline by around 5% over the year and this will have a direct impact on the national average given the weight of impression they carry on the figures.
Growth is also expected to slow in the regional cities as the market regulates itself in terms of price and demand. At present, prices and buyers are at their lowest and most populous which will see growth in terms of sales but prices will slowly decline in these bountiful markets.