House prices in UK cities up 8.4% year on year

scotland-priceProperty prices in UK cities are continuing to rise up 8.4% year on year. According to the data from the Hometrack city, the impetus for house price growth is shifting from the affordability constrained cities in southern England to cities in the Midlands and the North of England where affordability remains attractive. Many of these cities have seen relatively limited house price growth in the last six years and have significant upside for house price inflation.

In London prices have increased by 9.1% year on year to an average of £482,900 but the annual rate of house price growth has slowed to its lowest level for three years. Hometrack predicts that price growth to slow to low single digits in London in the next six to twelve months as demand softens in the wake of a raft of fiscal policy changes aimed at overseas buyers and investors as well as concerns over the impact of Brexit on the economy. As affordability levels become stretched, fewer households can participate in the market which will lead to reduced levels of turnover and a resulting slowdown in the rate of house price growth.

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