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London property prices have started to rise again as the capital’s housing market starts to stabilise.
According to the latest Hometrack UK Cities House Price Index the three months to June saw London property prices rise by 1.8 per cent, following a fall of 1 per cent over the previous six months.
Although the report only indicates an annual growth rate in London property prices of 0.7 per cent, the signs are that the capital’s property market has steadied, supported by the fact that 61 per cent of postcodes in London are currently registering month-on-month price rises.
The average discount required to sell London property has also turned the corner. Having grown from 1 per cent to 5 per cent on average over the last two years, it fell back to 4.8 per cent in the last quarter.
Property price growth continues to be strongest in the North West and Midlands, with Manchester leading the way with the highest annual growth rate of 7.4 per cent.
Close neighbour Liverpool followed close behind with growth of 7.2 per cent, followed by the midland cities of Birmingham and Leicester registering annual growth of 6.8 per cent and 6.5 per cent respectively.
Insight Director at Hometrack, Richard Donnell, said: ‘After 2 years of falling sales volumes and rising discounts to achieve a sale there are some signs of life returning to the London housing market. Discounts are finally starting to narrow as sellers become more realistic over pricing.’
He continued: ‘While prices in London have picked up over the last quarter, we expect the annual rate of growth to remain weak for the foreseeable future. The positive news is that greater realism on the past of sellers will support transactions, which have fallen by 20% since 2014.’
Donnell added: ‘The UK market is operating at two-speeds at the moment, with growth in regional cities in the Midlands and North West far outstripping those in the South. However, affordability pressures in the South East in particular are having a slowing effect on house prices as borrowers are priced out of the market.’