Average house prices have increased 2.8% annually and are positive across all regions for the first time in three-and-a-half years.
The Cities House Price Index from Hometrack reveals house prices have increased by 2.8% over the year to the end of February.
Growth in house prices have ranged from 6.8% in Leicester to 0.2% in Cambridge with Leicester and Manchester have recorded price growth of 17% since the Brexit vote in June 2016.
The rise in city house prices means first time buyers and home movers would require a higher deposit, larger mortgage or higher earnings to buy their property.
For buy-to-let landlords with existing properties the rise in house prices creates more equity which they can benefit from if they sell in the future.
London with slight rise in house prices
There has been a slight rise in London with average house prices up 0.4% annually following the three year repricing of homes in the capital.
The repricing has occurred firstly in higher value markets with an absolute price fall and secondly a wider discount between asking and achieved prices with the biggest discounts in central London.
The following table from Hometrack shows current house prices for regional cities and growth for the year to February 2019.
| City | Average house price | Annual change |
|---|---|---|
| Leicester | £178,400 | 6.8% |
| Manchester | £166,400 | 5.8% |
| Glasgow | £123,800 | 5.7% |
| Belfast | £134,100 | 5.6% |
| Liverpool | £121,100 | 5.3% |
| Birmingham | £163,900 | 5.1% |
| Cardiff | £207,700 | 5.0% |
| Edinburgh | £227,500 | 4.6% |
| Sheffield | £137,500 | 4.4% |
| Nottingham | £152,000 | 4.4% |
| Newcastle | £128,100 | 3.5% |
| Leeds | £164,600 | 2.8% |
| Bournemouth | £290,500 | 2.8% |
| Bristol | £277,300 | 2.6% |
| Aberdeen | £168,700 | 1.8% |
| Southampton | £227,500 | 1.5% |
| Portsmouth | £237,400 | 1.3% |
| Oxford | £402,200 | 1.0% |
| London | £481,800 | 0.4% |
| Cambridge | £420,900 | 0.2% |
Over the past three years regional cities outside southern England have recorded above average price inflation.
For London the data from Hometrack shows the proportion of postcodes registering price falls is 55% and is starting to reduce down from about 70% last October.
The rate of the falls is between 0% to -5% and prices continue to increase in 45% of London City postcodes, particularly outer boroughs, where values are more affordable.
For home movers leaving areas with the highest rising property values to areas with lower growth, may find they have extra equity for a deposit to buy a larger home or can reduce their mortgage.
Higher property values in London can benefit existing homeowners such as remortgage buyers giving them an opportunity to release capital which they can use to improve their home such as adding an extension or new kitchen.
Regional cities losing momentum
There has been strong growth since the Brexit vote in June 2016 for Leicester and Manchester with house prices up 17%, followed Birmingham up 16% and seven more cities up 5% or more.
Hometrack have recorded a slowdown in the rate of growth with a higher proportion of areas with price rise of under 5% and lower proportion above 5% growth.
Housing transactions are an important measure of the strength of the housing market that remains resilient with the number of transactions in line with the five year average.
Demand for housing is holding up from first time buyers and home movers with active buyers and sellers in the market although there has been a -25% drop in sales in London.
There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing and agree a lifetime mortgage to access cash from their home to improve your quality of life or pay for care at home.
Buyers appear to be shrugging off Brexit uncertainty as unemployment at a record low and mortgage rates still averaging 2%.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth to consolidate debt, home improvements or gifting to a family member.
Learn more by using the equity release calculator, property value tracker chart and mortgage monthly costs calculator. Start with a free mortgage quote or call us and we can take your details.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
