Taylor Scott International News
There are signs that the underlying rate of house price growth has peaked in UK cities despite many having average prices below levels recorded in 2007. Some 13 of the 20 cities tracked by the latest Hometrack Cities Index have registered a slower rate of growth in the third quarter of the year but annual growth is 8.4%, up from 6.6% in May. However, this year on year rate of house price growth masks more volatility in the underlying rate of growth, the report points out. The three month rate of growth expressed on an annualised basis appears to have plateaued. The firm says that this is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by almost 20% in August. Overall city level house price growth is still running ahead of earnings and the UK as a whole. Average house prices are below the levels recorded eight years ago in nine cities with Belfast still 46% lower than in 2007 followed by Liverpool where prices are still 14% lower over the same period. The outlook for housing demand remains positive against the backdrop of lower mortgage rates and rising consumer confidence however the latest mortgage data raises questions over whether the rate of growth since the May 2015 election can be sustained. The report suggests that demand is expected to moderate in the final quarter of 2015, with a modest slowdown in the pace of house price growth likely in the run up to the year end. ‘It is important not to read too much into one month’s headline results but there are signs that the pace of city level house price growth is likely to continue slowing. There has been a surge of demand since the election in May but weaker mortgage approvals and evidence from survey data suggests less frenetic demand in the final quarter of the year,’ said Richard Donnell, director of research at Hometrack. ‘Putting the relative performance of UK cities into wider perspective shows a wide variation in performance from city to city emphasising that there is no single UK housing market, for example, house prices in Belfast prices still remain almost half the level seen in 2007 while those in London are 43% higher,’ he explained. ‘The variation in growth reflects the strength of underlying demand for housing and the health of the local economy with the index throwing light on these localised trends at a granular level,’ he added. Taylor Scott International
Taylor Scott International, Taylor Scott
