The indexes record slow growth in property prices throughout England

One of the most influential indexes of property prices in the UK – Hometrack”s UK Cities House Price Index ( Index, Hometrack ) has published a new report. In the 20 largest cities in the UK recorded annual growth in property prices of 5% and above , that was the first time in a decade. This is a clear sign that the housing market is recovering everywhere but in the upper range of prices have already begun slowing.

Annual growth in housing prices three times higher than increases in wages, which amounted to only 1.3%. This circumstance is due to historically low interest rates on mortgage lending, as well as widespread support which the government of great Britain the industry of housing construction. All this has made buying property more affordable for families. In addition, a significant factor was the lack of supply of new housing, which also played a role in the growth of prices. However, the pace of price growth slowed, showing a monthly price growth of 0.6% per month for the last three months. If we compare these data with may 2014, consumer prices rose by 1.1% for the month. In the majority of cities prices are growing slower, the exception was, perhaps, only Glasgow, Edinburgh and Newcastle, where prices didn’t grow in the spring, and now recovered from their lowest values. After the referendum on secession of Scotland prices in Edinburgh and Glasgow grew by 4.1% and 2.2%, respectively. In Aberdeen, on the contrary, housing prices began to fall, showing a decline of 2% in the last quarter. A strong influence on the price of the real estate in Aberdeen is having the fall in world oil prices, which fell the past two months continuously.

Among the cities where housing prices are still below the national average – city Liverpool and Glasgow, where prices are about 40% lower than the national average.

And of course, the growth in property prices in London more than double the price growth for the rest of the UK. The growth in property prices in London of 17% shows a significant dominance of London over the rest of the UK, the distortion of the overall statistical data.

The famous centers of learning – Oxford and Cambridge saw a small fall in property prices was 1.2%, and 2.3% for the last three months. After several years of tremendous price growth of 42% and 52% , demand for property in these cities has decreased, which had an immediate impact on prices.

The slowdown in housing prices is a positive process that is needed by the market to enable more number of buyers to make a deal at a reasonable price for it. It is expected that the pace of price growth slow still further before the end of 2014.

® Helen Entree. 20.11.2014

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