House price growth halves in five years as market remains in ‘post-Brexit vote phase’

House prices in the UK’s biggest cities are now growing at less than half the rate of five years ago, research claims.

Data from the rebranded UK Cities House Price Index, now run by Zoopla rather than its Hometrack brand, shows that price growth among the country’s 20 largest cities was up 2.7% year-on-year at the end of December.

This compared with annual growth of 6% in 2013.

Zoopla said the slowdown has been driven by price falls in London (-0.2%) and Cambridge which has seen prices drop 3.8% annually, while the rate of growth has slowed across southern cities.

Meanwhile, cities in the north, the midlands, Scotland and Wales all saw average prices increase last year, with Edinburgh up 6.8% and Liverpool experiencing growth of 6.3%.

The analysis claims the housing market has been in a post-Brexit vote phase since mid-2016, having been in early recovery between 2009 and 2012 and broad recovery between 2013 and 2016.

Zoopla also predicted that most sale activity this year will come from outside London and forecast that first-time buyers will be the largest type of purchaser this year, overtaking home movers.

Richard Donnell, research and insight director at Zoopla, said: “The strongest performing cities are outside south-eastern England where affordability remains attractive and employment levels are rising.

“We expect current trends in price growth to continue across the rest of this year, with prices rising in line with earnings for much of the UK but lower growth and some house price falls in London and the south.”

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