Defying the national averages, the UK's major cities continue to see steady house price growth, particularly in Northern England and the Midlands.
Annual growth rate to remain at 2-3% in Q3 2020
The bulk of new pricing evidence continues to come from sales agreed before the lockdown. Data on pricing for new sales agreed in the last 4 weeks is starting to feed through and points to a resumption in the upward pressure in house prices seen at the start of the year.
We expect the headline rate of house price growth to remain in the 2-3% range over the next quarter. We do not see any downward pressure on prices materialising until much later in 2020.
Asking prices for sold homes 7% higher than last year
One indicator is the average asking price for homesmarked as sold on Zoopla in the first 2 weeks of June which are 7% higher than a year ago.
This is a return to levels seen over the first quarter of 2020. We are not saying the growth rate in our UK house price growth is going to rise over 5% in the near term, but the general direction of the two series track each other over time supporting our view that house price growth will hold up in the near term.
Strongest rebound in sales in northern cities
New sales agreed, compared to February this year, have recovered strongly in English cities. The rebound in sales has been led by cities in northern England - Leeds, Sheffield and Manchester. In English cities where the recovery in sales has been weaker, including Bristol, Newcastle and Cambridge, this may not be solely due to demand-side factors, but the available supply of homes for sale.
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