"City house price growth continues to be driven by above average increases in regional cities where attractive affordability and a lack of housing for sale is supporting house price inflation. "
The improved annual growth rate has been driven by cities like Edinburgh (8.1%), Nottingham (8.0%), Manchester (7.4%) and Birmingham (7.0%) where above average growth is being sustained by attractive affordability and a lack of housing for sale.
Growth in London has also stabilised with annual growth of 1.6%, but prices are still falling in real terms as the level of sales fails to keep pace with new supply coming to the market.
However prices have registered a small increase of 0.9% over the last three months, suggesting the downward pressure on prices in London has moderated for now, and Hometrack says house price inflation shows "no signs of moving into negative territory in the near term".
At the other end of the spectrum, Aberdeen (-6.6%) and Cambridge (-1.2%) are now lagging behind, despite evidence of the usual seasonal increase in housing sales across the country in the first three months of 2018.
Richard Donnell, insight director at Hometrack, commented: “The headline rate of city house price growth continues to be driven by above average increases in regional cities where attractive affordability and a lack of housing for sale is supporting house price inflation. This latest report identifies other cities such as Cardiff, Leeds, Newcastle and Sheffield as having recorded a sustained uplift in the rate of growth over the last 12 months.
“Whilst demand for housing in London has cooled over the last 18 months and the rate of house price growth has slowed there are some signs that underlying market conditions are improving. Last month we reported that residential values in London were falling across more than two fifths of postcodes and this has narrowed to 36% over March.
Falling asking prices over the last 2 years, especially in central areas of London, together with deeper discounts from asking to achieved prices and greater realism on the part of sellers is likely to support sales rates and reduce the downward pressure on prices. 2018 could be the year when housing turnover in London starts to plateau having fallen by almost a fifth since 2014.”
