London house prices to fall two percent during 2019 whereas half of regional cities recorded double digit growth post Brexit.
The latest Hometrack UK Cities House Price Index shows prices are higher by 2.7% year-on-year with London acting a drag on the market.
House prices in London are expected to fall -2% in 2019 due to market fundamentals such as affordability with the slowdown compounded by Brexit uncertainty.
The falls are expected in central London with annual growth down -4% with small gains in affordable outer London areas and could be an opportunity for first time buyers and home movers.
Regional city winners post Brexit
There have been ten regional cities with double digit growth of up to 16% since the Brexit vote in June 2016 lead by Birmingham.
The following table from Hometrack shows current house prices for regional cities and growth to date post Brexit vote to December 2018.
| City | Current house price | Growth post Brexit |
|---|---|---|
| Birmingham | £163,400 | 16% |
| Manchester | £168,000 | 15% |
| Leicester | £174,700 | 15% |
| Edinburgh | £237,900 | 14% |
| Nottingham | £154,000 | 14% |
| Leeds | £168,700 | 12% |
| Cardiff | £212,100 | 12% |
| Liverpool | £121,900 | 11% |
| Sheffield | £139,200 | 11% |
| Bristol | £282,700 | 10% |
| Portsmouth | £239,600 | 9% |
| Bournemouth | £288,300 | 9% |
| Belfast | £130,900 | 9% |
| Glasgow | £122,000 | 9% |
| Southampton | £228,800 | 7% |
| Newcastle | £129,300 | 5% |
| Oxford | £416,200 | 2% |
| London | £481,200 | 1% |
| Cambridge | £408,000 | -4% |
| Aberdeen | £153,400 | -6% |
Other strong performances are from Manchester and Leicester up 15%, Edinburgh and Nottingham higher by 14% over two and a half years.
One advantage of rising house prices in regional cities for homeowners is remortgage buyers can now release capital for home improvements.
London, Oxford and Cambridge lead the recovery in house prices from 2009 to 2016 and have experienced a slowdown with affordability issues.
Over this period older homeowners accumulated considerable value in their properties and the equity release mortgage buyer can access this wealth to consolidate debt or pay university fees for grandchildren.
First time buyers boosting demand
House prices are expected to continue to rise at above average rates in regional cities in 2019 especially where the jobs market is strong.
For regional cities affordability is less of a barrier to owning your home with house prices in Birmingham at £163,400 compared to London, almost three times higher at £481,200.
The government’s Help to Buy scheme has allowed first time buyers to take their step on the property ladder with only a 5% deposit, 20% equity loan and 75% provided by a mortgage from a lender.
Nationally first time buyers are expected to be the largest group of home buyers and Hometrack expects this to continue in 2019.
This is in contrast to buy-to-let investors that have struggled with making new purchases due to changes in taxation and higher stamp duty land tax, making it less attractive to buy.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as improve your quality of life or buy a more expensive home.
