House price growth spreads with largest 20 UK cities all showing annual increases - but signs emerge prices may have peaked
Property prices in London soared by 17% on last year in October
16 cities out of 20 recorded house price inflation below the UK average
UK average house prices grew by 9.2% to £185,700
By Camilla Canocchi for Thisismoney.co.uk
House prices have grown at more than five per cent annually in all 20 of the UK's largest cities for the first time in 10 years, although there are fresh signs of a slowdown in the market.
Glasgow and Liverpool recorded the slowest house price growth at 5.5 per cent in October compared to last year, the latest Hometrack UK Cities house price index shows.
In London, prices have leapt 17 per cent in the past year to £402,800 and are up 30 per cent compared to their peak in 2007.
Spreading the recovery: House prices across all of Britain’s top 20 cities have been growing at more than 5% for the first time in 10 years
Bristol and Cambridge followed London as second and third for price rises, with annual increases of 13 per cent and 12 per cent respectively.
However, Hometrack said momentum was slowing, as 16 cities out of 20 have recorded house price inflation below the UK national average - which is heavily skewed by London growth.
Richard Donnell, research director of Hometrack, said momentum in house price increases was starting to slow with less pent-up demand for housing than two years ago.
He said: 'Whilst mortgage rates remain low, new mortgage affordability tests and loan to income caps are impacting on the ability of marginal buyers to access the market, especially in the higher value markets such as London.
'On top of this, concerns over the impact of the global economy on the UK’s economic outlook are likely to come more to the fore.'
Growth slowdown: 16 cities out of 20 have recorded house price inflation below the national average
National average house prices are up 9.2 per cent on last year and nearly 1 per cent above their 2007 peak at £185,700.
London prices continue to buck the national trend, with homes 117 per cent more expensive than the average in the rest of the UK.
And prices in Cambridge, where growth outstripped even the capital in the survey last month, are 78 per cent higher than the national average.
Donnell said they expected the rate of house price growth to slow further in the run up to the end of the year.
UK house prices: London continues to buck the trend with prices growing by 30 per cent compared to 2007
He said: ‘Despite the economic uncertainty, the slowdown in the UK housing market will be welcome news for policy makers who want to avoid a debt fuelled acceleration in house prices supported by record low mortgage rates.
‘However, there are still bright spots of activity amid reports of a wider national slowdown. For the first time since the financial crisis, an improved economic outlook has seen house prices in cities outside the south of England rising off a low base.
‘By the end of the year, we could well see monthly house price growth in London slipping below that of some of major cities outside the South East.’
Recent housing market surveys have all pointed towards a slowdown in price rises.
Data by listing website Rightmove showed sellers were cutting house prices to attract buyers during the quieter winter months, with areas outside London posting the biggest dips.
Asking prices fell 1.7 per cent in the month to mid-November, Rightmove said, as buyers begun to show price resistance.
This echoes's last month's survey by the Royal Institution of Chartered Surveyors, which found that property price gains have gradually slipped in the three months to October, with more stringent checks by mortgage lenders and fears over impending interest rate hikes taking a toll.