House price growth in Liverpool and Birmingham now outstripping London
House price growth in London has slowed to the weakest pace seen in nearly four years, with property values in Liverpool, Birmingham and Manchester now rising more quickly than the capital, according to an index.
Year-on-year house price growth in London was running at 6.4 per cent in January – the lowest level recorded since June 2013 – according to property analysts Hometrack.
The report said house price growth in London is expected to slow towards a "standstill" during 2017.
The index, which monitors house prices across the UK's 20 biggest cities, found Bristol remains the city with the strongest house price growth, with an annual increase of 9.5 per cent in January.
Oxford has the next fastest growth, with a 9.2 per cent annual house price rise. Manchester, where property values have increased by 8.3 per cent year-on-year, is in third place.
London was placed eighth, behind cities including Southampton and Bournemouth.
Aberdeen is the only city on the list where house prices have fallen over the last year, recording a 3.7 per cent decline.
Hometrack said house prices in London, at £486,600 on average, are now 85 per cent higher than they were in 2009. Other major cities, which have not experienced such fast house price growth over this period, are continuing to see prices heading robustly upwards.
Richard Donnell, insight director at Hometrack, said: "Growth in London has been superseded by large regional cities such as Manchester, Liverpool and Birmingham.
"When you consider that house prices in London are 85 per cent higher than they were in 2009 it is not surprising that the pace of increases is slowing toward a standstill as very high house price increases mean affordability is stretched."
Mr Donnell said the timing and scale of future house price growth in general would depend upon the outlook for jobs, incomes and mortgage rates.
Here are average house prices in January across the major UK cities in Hometrack's research, followed by the year-on-year increase in prices: Bristol, £263,200, 9.5% Oxford, £430,200, 9.2% Manchester, £150,600, 8.3% Southampton, £223,200, 8% Birmingham, £147,400, 7.4% Liverpool, £116,200, 7.1% Bournemouth, £275,600, 6.6% London, £486,600, 6.4% Portsmouth, £221,100, 6.4% Leicester, £160,500, 6% Glasgow, £115,200, 5.7% Leeds, £154,700, 5.5% Nottingham, £140,300, 5.4% Cardiff, £192,900, 5% Sheffield, £128,500, 4% Edinburgh, £200,700, 3.7% Newcastle, £123,900, 3.5%
Belfast, £126,100, 2.8% Cambridge, £418,100, 2.2% Aberdeen, £186,200, minus 3.7%