House prices growing at highest quarterly rate for four years

House price inflation in London is now at its lowest level for five years, according to Hometrack.

The data company reports that London annual price growth has slowed from 14% in May last year to 3.3% in May this year, with the average house price now at £492,200.

Overall, average prices across the 20 UK cities that the firm tracks have risen by an average of  5.1% in the last year to £250,200. Annual house price inflation was running at 8.8% a year ago.

Prices have increased by 3.5% over the past three months, which is the highest quarterly rate for four years, mainly driven by Manchester and Birmingham where growth has been at 3.3% and 3.8% respectively.

On a yearly basis, Birmingham saw prices increase the most by 7.7% in May to £153,500.

Manchester, Leicester and Nottingham have all reported 6.8% annual growth, at £154,800, £165,000 and £146,000 respectively.

The index showed prices across the UK were up 4.7% annually to £210,200, but Richard Donnell, research and insight director at Hometrack, is forecasting growth of just 2-3% for the rest of the year.

He said: “Our latest report identifies two contrasting trends. First there is clear potential for additional house price growth in cities outside south-eastern England.

“House prices in London have grown 90% since 2009 but growth in ten cities has been below 30% over the same period.

“So long as the economy continues to grow, and mortgage rates remain low, we expect house prices to keep rising at a steady rate and close the gap with London.”

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2 Comments

  1. nextchapter

    This article and research is so far removed from what is actually going on. It is actually delusional.

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  2. Property Paddy

    I think closing the gap on London prices is a bird that flew off many, many moons ago !

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