London’s house price slowdown ‘bottoming out’ after 5-year low
LONDON’S house price slowdown has “bottomed out” after bouncing back from its five-year low in June, according to Hometrack.
The capital’s average rate of house price growth was 2.8pc in July, up from 2.3pc the previous month.
Richard Donnell, head of research at Hometrack, said: “The London housing market has registered a rapid deceleration in house price growth since the start of 2016 as affordability pressures impact demand and Brexit adversely affected housing market sentiment.”
The number of homes sold in London has fallen 17pc since 2015. He said: “Sellers are slow to accept downward adjustments in prices in the face of weaker, price-sensitive demand.”
Across the 20 biggest cities in the UK, the average annual rate of growth was 5.3pc in July, down from 7.4pc in the same month last year. The fastest rate of growth was in Birmingham, at 8pc, up from 6.8pc last year. It was fol- lowed by Manchester at 7.1pc and Nottingham at 6.9pc. Aberdeen was the only city to report a fall in house prices, where the average property value is now 16pc lower than in December 2014, due to the fall in the oil price and its impact on the local economy.
Mr Donnell said: “There remains a clear divide between the prospects for house price growth in regional cities, where affordability levels are attractive, and the prospects for house price growth in London and other high value cities in southern England. We expect house price growth in regional cities to be sustained at current levels for the rest of 2017 whereas London is set for a sustained period of low nominal house price growth and lower sales volumes.”
It came as official figures revealed that the number of homes built in the year to June increased by 11pc to 153,330, far below the Government’s target of building 200,000 homes per year. It has also still not reached the same level as the 2007 peak, but surpassed the rate set in 2008. The figures also showed that the number of homes starting to be built in England in the second quarter of 2017 was 3pc lower than the previous quarter, at 41,180, although this was 13pc higher than last year.
Polly Neate, Shelter chief executive, said: “While there has been a small increase in homes being built, sadly we’re nowhere near touching distance of the 250,000 homes a year we desperately need.
“It’s also extremely worrying to see housebuilders shifting down a gear and starting to build even fewer homes.”