A new research has revealed that London’s house price growth has slowed to the lowest rate in over three years.
Property market analysts Hometrack say the rate of house price growth in the last 12 months to November dropped to 7.6%, the lowest level in 39 months. To put this in context, at the same time one year ago house price growth rate in London was at 11.8%.
Richard Donnell, Hometrack’s head of research, named the Brexit vote as one of the main reasons for a drop in trust in the capital’s housing market. Other big decisions, like the additional stamp duty surcharge, were other main influencers.
He added:
London house prices are elevated, affordability is stretched, and the market has lost a lot of momentum.”
“People aren’t rushing to sell, but the short-term moves in house prices are about changes in demand, which has softened significantly.”
On average, the UK’s 20 biggest cities experience a price growth of 7.7%. For next year, however, Hometrack has only forecast a growth of 4%.
The analysts also state that London’s growth will quickly be outpaced by the regions, namely Birmingham, Manchester, Leeds, Leicester, Nottingham and Portsmouth.
Mr Donnell said: “These markets are not as deep and mature as London, and there is an element of risk, but there is definitely opportunity to invest elsewhere in UK.” He added that economies such as Birmingham and Manchester “are starting to benefit from the lack of affordability of housing in London”.
Furthermore, the report says that cities where house prices have experienced a sharp rise over the last five years but are now slowing down (like London, Oxford, Bournemouth, Bristol and Cambridge) the number of homes sold dropped by 5% this year alone.
