Hometrack UK Cities Index - November 2019

National indeces can show overall trends, but by drilling down to the city-by-city level, Hometrack provides a much more useful tool for property investors.

Headlines

• UK city house prices have grown by an annual average of +4.4% over the last decade.
• While the election result removes some uncertainty, market fundamentals set the context for city house price growth and market activity in 2020.
• We expect UK city house prices to grow by +3% in 2020 with continued above average growth in the most affordable regional cities while growth in London is expected to be +2%.

"UK city house price inflation has averaged 4.4% per annum over the last decade with average prices up by total of 54% since 2009. The headline rate of growth currently averages 3.4%, supported by price falls in the final months of 2018 dropping out of the annual growth rate and a further pick-up in growth in London. Price growth ranges from -0.7% in Aberdeen to +5.4% in Edinburgh. ​​"There is a marked difference between the current and 10-year growth rates across UK cities. Cities in southern England have registered a marked slowdown in price inflation over the last 1-3 years with current growth rates well below the 10-year average – Oxford, Southampton, Portsmouth London, Cambridge, Bristol.

Click image for larger scale

"​In contrast, cities that have been slow to see prices recover, registering some of the lowest price growth over the last decade, are those currently registering above average growth e.g. Belfast, Liverpool, Glasgow.

"We expect cities with below average affordability levels, typically those with p/e ratios of less than 6x, to register above average house price growth over 2020. Annual growth of up to 4% is realistic, so long as mortgage rates remain low and employment remains high."

Content from Zoopla/Hometrack - click for the full report