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No-deal Brexit to accelerate London house price drop

London house prices could sink up to seven per cent next year if no Brexit deal is reached by the 31 October deadline date, according to the latest research.

If the UK exits the European Union with a deal London house prices will fall by a smaller 4.7 per cent, continuing the trend of declining property prices in the capital.

Research by accountancy firm KPMG published this morning shows that the average property in the capital would cost £453,000 in 2020 following a smooth exit. However, after a no-deal Brexit the average London house price would drop to £422,000.

A no-deal Brexit would trigger a drop in house prices in every region of the UK, with the sharpest fall of 7.5 per cent seen in Northern Ireland.

The latest research shows that a drop of 10 to 20 per cent is “not out of the question” if markets react “stronger than anticipated”.

KPMG chief economist Yael Selfin said: “The housing market has been stuck in the slow lane since 2016 – with the changes to stamp duty and the uncertainties of Brexit putting the market on the back foot.

“As our forecasts show, a no-deal Brexit will see house prices decline significantly across the UK in 2020 by an average of 6.2 per cent, with more severe falls of around 10 to 20 per cent also possible if we look at historic precedents.”

Last month the Bank of England’s monetary policy committee (MPC) said that if the UK’s departure from the EU is smooth and some recovery in global growth is seen it could raise interest rates “at a gradual pace and to a limited extent, as it unanimously chose to hold the main interest rate at 0.75 per cent, where it has stood since August last year.

The committee said under no deal, the “interest rate decision would need to balance the upward pressure on inflation, from the likely fall in sterling and any reduction in supply capacity, with the downward pressure from any reduction in demand”.

In July, MPC member Gertjan Vlieghe said the bank might have to slash interest rates to nearly zero in the event of a no-deal Brexit.

By Jessica Clark

Source: City AM

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London house prices flat or falling for 16th month in a row

House prices in London have now been flat or falling for a longer period than was seen during the economic downturn of 2008 and 2009, according to an official report.

Property prices in the capital have failed to grow year on year for 16 months in a row, with the latest figures showing a 2.7% annual decrease in June, a report from the Office for National Statistics (ONS), Land Registry and other bodies shows.

This compares with 15 months of prices falling over the year in London during the economic downturn of 2008 and 2009.

However, prices in the capital recorded sharper falls during the 2008 and 2009 period than has been the case more recently, the report said.

The average London house price in June was £467,000, compared with £230,000 across the UK generally.

Across the UK, house prices increased by 0.9% annually in June – a figure unchanged from May.

UK house price growth has slowed over the past three years – mainly driven by parts of southern and eastern England.

Average UK house prices peaked at £232,000 in August 2018.

In June, average house prices increased year on year by 4.4% in Wales to reach £164,000, by 1.3% in Scotland to £152,000 and by 0.7% in England to £247,000.

In Northern Ireland the average house price is £137,000 – 3.5% higher than a year earlier.

Within England, the Midlands is showing the strongest house price growth, with prices up by 3.2% year on year in the East Midlands and by 2.6% in the West Midlands.

Howard Archer, chief economic adviser at the EY Item Club said: “We believe, with Brexit due to occur on October 31 – and it currently very unclear what will happen then – uncertainty will weigh down on the economy over the next few months at least and hamper the housing market.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “It is steady as she goes for the housing market, which is no mean feat given that it is the summer months when things traditionally get quieter and the backdrop of Brexit uncertainty.

“London is still creating a drag on average house price growth, with prices falling 2.7% over the year to June.

“However, this was an improvement on the May fall of 3.1%, suggesting price falls could be slowing and the market stabilising.”

Referring to the London market, Jonathan Hopper, managing director of Garrington Property Finders, said: “Prices in the capital are now falling more slowly, but the direction of travel remains clear.

“After 16 consecutive months of softening, sliding, and occasionally dropping, prices, the correction is still under way.”

By Vicky Shaw

Source: Yahoo Finance UK

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London house prices are tumbling: will it spread across the UK?

London house prices are falling at the fastest rate since the tail-end of the financial crisis.

The latest house price reading from the Office for National Statistics found that prices in the UK’s capital slid by 4.4% year-on-year in May.

That’s the biggest fall since 2009.

The big question is: will this spread across the UK?

Why London has been hit hardest by the housing downturn
The Office for National Statistics house price index is quite new. But it’s also quite comprehensive and it does come out a lot later than the other surveys, so the data is as close to “finished” as you’ll get.

So while a 4.4% slide in London house prices does seem like a big drop, there’s no obvious reason to discount it. And it does make sense, for reasons we’ll go into in a moment.

All I would say is that if you live outside London, and are hoping for a big slide elsewhere in the UK (prices across the country rose by about 1.2% in May), I wouldn’t necessarily expect it to spread.

There are three main reasons to believe that London is an outlier here. For a start, London prices went up by a lot more than those elsewhere in the country. It’s easy to forget this, because a lot of property comment is written by people living in London, for people living in London.

But the reality is that not every part of the UK has seen the ludicrous price boom that London has enjoyed/endured (delete according to whether you own a house or not). As a rule of thumb, in England and Wales, the further from London you go, the less wild the price appreciation.

Scotland is somewhat different in that Edinburgh is the centre of property price gravity, while Aberdeen has its own unique cycle linked to the price of oil. But prices have still lagged the southeast of England considerably.

As for Northern Ireland, prices there have yet to catch up with their 2007 peak, because Northern Ireland was swept up in the Irish property bubble and the epic bust that followed.

So London is now falling hardest because prices there soared the most.

Secondly, London was always the most vulnerable to all the legislative changes that have been made to try to cool the housing market.

London was the buy-to-let capital. But it also offered the lowest yields (because prices were so high). So over-leveraged London landlords were the first to feel the pain when the withdrawal of tax relief on buy-to-let mortgages kicked in.

Right after the changes were announced, one of the big banks calculated that London house prices would probably fall by about 20% overall as a result, and that now looks like it was a pretty good forecast.

And it’s not just buy-to-let. London was also the main destination for all the footloose and fancy-free global capital that wanted to find a secure bolthole. Once foreign investors started being taxed more heavily, and their affairs began to attract ever-so-slightly more scrutiny than before, the market at the top end of London felt the squeeze more than anywhere else.

Finally, there’s Brexit. I think it’s a pretty minor factor – relative to tax changes and increased suspicion of wealthy foreign buyers – but if it’s going to hit anywhere, then it’s London. (That said, the slide in the pound does have the side effect of making London property appealing to those globetrotters who do still want to buy here.)

Here’s what it would take to create a UK-wide property crash
Of course, if you’re outside London, then I wouldn’t despair either. Prices elsewhere in the UK aren’t exactly rocketing.

Overall, house price growth across the board (at around 1.2%) is now significantly lower than wage growth (around 3.6%). It’s also lower than inflation (about 2% or 2.8%, depending on your favoured measure).

In other words, house prices are falling in “real” (after inflation) terms across the board. Which is just what we’ve been hoping for.

Why are we hoping for that? If house prices fall in real terms, then they become more affordable. That defuses a lot of the political tension in the atmosphere (for most people, property ownership defines which side of the “wealth inequality” divide they feel they are on).

Another benefit of prices falling in real terms but staying basically flat in nominal terms, is that it doesn’t look too scary to existing homeowners. People will learn to cope with owning a house that doesn’t appreciate by roughly double their annual wage every year. But no one likes the idea that they might fall into negative equity.

So a fall in real terms keeps household and bank balance sheets looking healthy, while making life easier for potential first-time buyers.

For a harder fall or a full-on crash, you’d realistically need to see a rise in unemployment, a rise in interest rates, or both. Both of those factors create large numbers of people who suddenly can’t pay their mortgages, and therefore become forced sellers (sometimes via repossession).

Neither of those seems likely in the near term. And ideally, by the time we get to an economic environment where either of those things rise sharply, we’ll have a more affordable market in any case.

That might be too much to hope for – particularly as politics can always throw a spanner in the works – but I’ll keep my fingers crossed.

Of course, it means that the huge numbers of people who seem to be relying on property to provide their pension as well as a roof over their heads, might have to think about diversifying their portfolios.

If you’re nearing the stage of your life where you’re wondering how you’ll maintain your income and your standard of living once you stop working, I’ve got a seminar you should attend.

On the evening of 9 October, The Week’s City editor, Jane Lewis, will be talking to MoneyWeek’s David Stevenson and Charlotte Ransom of challenger wealth manager Netwealth about how to plan for the retirement you deserve. We’ve run these events before and they’ve always proved very popular, so grab your ticket now before they sell out.

By: John Stepek

Source: Money Week

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London house prices plunge at fastest annual rate since 2009

London property values fell by 4.4% in the year to May – the biggest decline since August 2009, the ONS and Land Registry said.

House prices in London have tumbled at the fastest annual rate since 2009, official figures show.

London property values fell by 4.4% in the year to May – the biggest downward slide for the capital since August 2009 when there was a 7% fall.

Housing market experts blamed Brexit uncertainty combined with “punitive” stamp duty costs.

Across the UK as a whole, house price growth remains slow, with northern areas and Wales seeing stronger growth, the report, released jointly by the Office for National Statistics (ONS), Land Registry and other bodies said.

Average UK house prices increased by 1.2% in the year to May, slowing from a 1.5% increase in April.

The average UK house price stood at £229,000 in May.

While London house prices fell over the year, the area remains the most expensive place to purchase a property with an average price of £457,000.

The report said London house prices have been falling over the year since March 2018.

ONS head of inflation Mike Hardie, said: “Annual house price growth remained slow but was once again strong in the North West and Wales.

“However, London experienced its biggest annual fall since August 2009.”

Average house prices increased annually by 3% in Wales to reach £159,000; by 2.8% in Scotland to £153,000; by 1% in England to £246,000 and by 3.5% in Northern Ireland to £135,000.

The North West was the English region with the highest annual house price growth in May, with values increasing by 3.4%. This was followed by the West Midlands, where house prices increased by 2.7%.

While prices fell in London by 4.4% over the year to May 2019, affordability is still an issue for those buying in the capital and South East as prices remain relatively high compared to incomes

Jonathan Harris, mortgage broker at Anderson Harris

Jonathan Harris, director of mortgage broker Anderson Harris, said: “House price growth is slowing as sentiment continues to weaken, partly as a result of Brexit uncertainty.

“While prices fell in London by 4.4% over the year to May 2019, affordability is still an issue for those buying in the capital and South East as prices remain relatively high compared to incomes.

“Mortgage rates remain low and continue to support transactions. Re-mortgaging remains strong as many people stay and improve rather than footing the considerable bill for a move to another address.”

Gareth Lewis, commercial director of property lender MT Finance, said: “The South West (where prices increased by 2.6% annually) and North West have shown reasonable growth over the past year and are propping up UK average property prices.”

Annual change in UK house prices
(PA Graphics)

Sam Mitchell, chief executive of online estate agent Housesimple, said: “House price growth remained somewhat subdued in May, but this does not tell the whole story…

“London’s price fall has plagued the UK average partly due to uncertainty but mainly because of the punitive stamp duty regime, while slowdowns in the South and East of England over the past three years have also taken their toll.

“Yet economic factors that underpin the property market are looking strong.

“Plus, the housing market is still showing sturdier than expected signs of resilience amid political uncertainty.

“Low unemployment and historically low interest rates are leading to high demand from buyers supporting house price growth, particularly in the North West and West Midlands.”

Marc von Grundherr, director of lettings and estate agent Benham and Reeves, said: “Although price growth may remain muted, these ‘slower’ markets are still home to the highest property prices in the UK.”

Source: Express and Star

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London house prices suffer UK’s steepest annual fall ahead of original Brexit deadline

House prices in London plunged 1.9 per cent in the year to March, the largest annual fall in the country, ahead of the UK’s original Brexit date.

UK-wide house prices jumped 1.4 per cent over the twelve months, but in London the average property price fell almost two per cent to £463,000, according to HM Land Registry figures.

Homes in the capital also fell 0.4 per cent month-on-month in March as the drop continued in the run up to the anticipated Brexit date of 29 March.

Despite the fall, the figures show an improvement on the 2.7 per cent annual drop to February.

Former RICS residential chairman and north London estate agent Jeremy Leaf said: “Once again, we are seeing London acting as a drag on the rest of the UK housing market as despite improvements in affordability, almost record low mortgage rates and unemployment, combined with a shortage of stock.

“With prices down one month, up the next – no real pattern has emerged.”

Chief executive of online estate agent Housesimple, Sam Mitchell, said the data provided a “distorted picture” as they were based on sales completed during peak Brexit chaos.

He said: “January and February, when offers would have been made for March completions, was approaching the eye of the Brexit storm.

“That uncertainty, and the political squabbling in Parliament, fed through to buyer and seller confidence, particularly in London and surrounding areas.”

He added: “The market has now settled down, and with the EU leave date extended to the end of October, we are expecting more buyers and sellers to take advantage of this Brexit limbo, and relatively calm market conditions, to proceed with sales and purchases.”

By Callum Keown

Source: City AM

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London house prices: How Brexit uncertainty has hit house prices in every borough

London is “acting as a drag” on the rest of the UK housing market, with prices across the capital falling in the last year, according to new figures from property giant Rightmove.

While some regions in the UK such as the midlands and the north west started to kick the Brexit uncertainty that has gripped the housing market in recent years, Greater London average asking prices fell 2.5 per cent annually.

A sales slump in central London saw average asking prices fall 3.8 per cent annually to £757,773 in inner-city areas, while the average in outer London, including cheaper boroughs such as Bexley, Barking and Dagenham fell 0.9 per cent to £512,726.

This came despite the annual spring surge in prices, which only drove Greater London up 1.2 per cent on a monthly basis.

The slumps compared to a record-breaking year in other parts of the UK, however, as average asking prices in Wales, the Midlands and the north west of England bucked any Brexit blues to hit all-time highs, Rightmove found.

London boroughs

Worst hit in the capital was Westminster, where average asking prices fell 6.3 per centannually – but still clocked in at an eye-watering £1.4m. The same was true of Britain’s most expensive area to live, Kensington and Chelsea, where average asking prices fell 3.9 per cent year-on-year to £1.6m.

Kensington And Chelsea Street, Egerton Crescent Named Most Expensive For Second Year Running
Kensington and Chelsea saw a 3.9 per cent annual fall (Source: Getty)

The only boroughs to see an annual rise in average asking price were Bexley and Barking and Dagenham, two of London’s cheapest areas. Bexley rose 0.6 per cent to £408,233, while Barking and Dagenham rose 0.9 per cent to £316,839.

Meanwhile in zones one and two, Lambeth fell 4.7 per cent to £632,590Hackney fell 4.9 per cent to £626,000 and Tower Hamlets fell 6.1 per cent to £559,475.

Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors (Rics) residential chairman, said: “London is acting as a drag on the rest of the UK housing market and prices don’t include inflation so have risen or fallen further in real terms.

“The spring bounce is taking place but not reaching to the heights we would have expected and certainly not in the capital.”

Borough

Avg. price May 2019

Monthly change

Annual change

Barking and Dagenham £316,839 1.0 per cent 0.9 per cent
Bexley £408,233 1.2 per cent 0.6 per cent
Hammersmith and Fulham £931,171 0.9 per cent -0.2 per cent
Sutton £470,697 2.5 per cent -0.3 per cent
Southwark £634,232 -1.8 per cent -0.5 per cent
Islington £770,123 1.1 per cent -0.8 per cent
Hillingdon £492,585 1.7 per cent -0.9 per cent
Bromley £530,492 0.5 per cent -0.9 per cent
Waltham Forest £481,926 0.8 per cent -1.0 per cent
Enfield £457,398 0.8 per cent -1.2 per cent
Ealing £555,611 0.8 per cent -1.4 per cent
Havering £406,075 -1.2 per cent -1.5 per cent
Brent £577,818 1.5 per cent -1.5 per cent
Camden £980,210 1.2 per cent -1.5 per cent
Newham £407,868 -0.3 per cent -1.8 per cent
Merton £645,116 2.7 per cent -2.0 per cent
Hounslow £540,484 -0.9 per cent -2.0 per cent
Croydon £437,195 1.2 per cent -2.2 per cent
Kingston upon Thames £610,076 0.4 per cent -2.3 per cent
Harrow £549,634 0.4 per cent -2.3 per cent
Redbridge £451,503 -0.4 per cent -3.2 per cent
Richmond upon Thames £832,012 2.7 per cent -3.3 per cent
Wandsworth £793,014 -2.4 per cent -3.5 per cent
Lewisham £464,200 1.3 per cent -3.5 per cent
Barnet £639,192 0.7 per cent -3.5 per cent
Greenwich £441,287 -0.1 per cent -3.5 per cent
Haringey £602,170 -0.1 per cent -3.7 per cent
Kensington and Chelsea £1,590,380 4.8 per cent -3.9 per cent
Lambeth £632,590 0.8 per cent -4.7 per cent
Hackney £626,095 0.1 per cent -4.9 per cent
Tower Hamlets £559,475 -0.5 per cent -6.1 per cent
Westminster £1,400,270 -1.7 per cent -6.3 per cent

The rest of the UK

The rest of the country painted a very different picture, according to Rightmove.

For homes coming to market this month in Wales, the Midlands and the north western England, average asking prices hit all-time highs, as a shortage of demand pushed prices up.

Wales broke through the £200,000 barrier for the first time ever, at £200,386, rising 4.1 per cent year-on-year, while houses in the west Midlands rose three per cent to £232,247.

Travel Images Of Manchester
The north west of England, including Manchester (pictured) saw an annual rise in prices (Source: Getty)

But for those commuting into central London from outside the capital, prices fell. In the south east of England, the annual average asking price fell 1.1 per cent to £407,239.

Rightmove director Miles Shipside said buyers were largely ignoring Brexit, with buyers spurred into action in the record-breaking regions.

“Despite the ongoing political uncertainty, agents are reporting that the lure of the right property at the right price still attracts good interest. In spite of some of the challenges in the market, interest in property remains very high,” he said.

By Alex Daniel

Source: City AM

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London house prices start to stabilise after three-year dip

Signs that London’s house prices could be starting to stabilise emerged this morning, with a new study showing that values picked up slightly in February.

According to Zoopla, househunters that have previously held off on deals are seeking out buying opportunities in the capital following weaker house price growth amid the Brexit uncertainty.

The property portal said that “while market conditions remain weak, there are signs of a pick-up in demand following a 3-year house price re-correction of London homes”.

The rate of London’s annual house price growth picked up modestly in February, climbing 0.4 per cent when compared with the same month in the previous year.

The number of London postcodes registering a fall in house prices also dipped from 69 per cent in October to 55 per cent in February.

Every city in the UK registered a rise in house prices in February for the first time since 2015.

The city which saw the sharpest year-on-year rise in house prices was Leicester, which registered a 6.8 per cent bump in values over the 12 months.

Richard Donnell, research and insight director at Zoopla, said that there was a “greater realism on pricing by sellers”.

Donnell added: “With unemployment at a record low and mortgage rates still averaging two per cent, buyers appear to be largely shrugging off Brexit uncertainty until there is a material change in the overall outlook.”

Yet today’s figures come despite a swathe of recent data showing that activity in the capital’s housing market has largely continued its downward trajectory in recent months.

House price rises in January fell to 1.7 per cent across the UK, according to recent Office for National Statistics (ONS) data, with London recording the lowest annual growth out of any region.

The Royal Institution of Chartered Surveyors (Rics) also warned recently that uncertainty over Britain’s imminent departure of the EU is likely to damage the UK housing market over the coming months.

By Sebastian McCarthy

Source: City AM

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UK inflation up, London house prices fall by most since 2009

Britain’s main inflation rate ticked up last month but stayed close to January’s two-year low, helping consumers maintain their spending power as wage growth also picked up, even though the timing of Brexit remained uncertain.

Wednesday’s official data also showed house prices rose at the weakest annual pace in 5 1/2 years in January, curtailed by the biggest drop in London prices since September 2009, just after the low point of the global financial crisis.

Consumer prices rose at an annual rate of 1.9 percent in February after a 1.8 percent increase in January, the Office for National Statistics said. A Reuters poll of economists had forecast an unchanged rate of inflation.

Economists said they expected inflation to rise above the Bank of England’s 2 percent target soon, especially as many household utility bills are due to increase in April.

“Inflation picked-up for the first time since August 2018, with rising prices across a range of items, including food and alcohol,” said Suren Thiru, an economist at the British Chambers of Commerce.

“Businesses also continue to report that the cost of imported raw materials is rising. As these high input costs filter through supply chains, they could increase the upward pressure on consumer prices in the short-term,” he added.

Still, British government bond futures rose slightly after the data showed core inflation, which strips out volatile food and energy prices, edged down, leaving the overall picture of domestic price pressures in Britain muted ahead of Brexit.

Weaker inflation, combined with rising wages and the lowest unemployment rate in 44 years, has taken the edge off the uncertainty about Brexit for many households, whose spending drives Britain’s economy.

Data due on Thursday are expected to show that retail sales grew an annual 3.3 percent last month, weaker than just before the referendum in 2016 to leave the European Union but above its average for much of the last decade.

Britain’s modest inflation is also helping the Bank of England as it holds off on raising interest rates while it waits for the outcome of Britain’s Brexit impasse.

Several policymakers at the central bank have said they want to see firm evidence domestic inflation pressure is building before they vote to raise rates.

The ONS said house prices in January rose by an annual 1.7 percent across the United Kingdom as a whole, the smallest increase since June 2013, when Britain was still struggling to shake off the effects of the global financial crisis.

Prices in London alone fell by 1.6 percent, marking 11 months where prices have not risen.

The ONS said prices in the capital were down 3.3 percent from their recent peak in June 2017, compared with an almost 18 percent peak-to-trough fall during the financial crisis.

By Andy Bruce, William Schomberg

Source: UK Reuters

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UK house price growth hits six-year low as experts warn of ‘Brexit downward spiral’

London house prices fell 1.6 per cent in the year to January, official data revealed today, as experts warned a mix of Brexit uncertainty and the death of buy to let are hurting the value of homes.

The sharp price drop in the capital’s housing market meant overall UK house prices rose just 1.7 per cent on an annual basis, the Office for National Statistics (ONS) said today, the lowest rate since June 2013.

London’s decline deepened after a 0.7 per cent drop in December 2018, while homes in the east of England lost 0.2 per cent of their value in January, compared to the same month the year before. This contrasted with growth of 4.2 per cent in the Midlands and 2.8 per cent in northern England.

Although London house prices have fallen, it remains by far the most expensive place to purchase a property in the UK, at an average of £472,000. It is followed by the south east and the east of England, at £321,000 and £288,000 respectively.

Real estate partner at Pinsent Masons, Kevin Boa, said: “It’s no wonder that there is little buyer appetite whilst Brexit uncertainty persists, alongside the death of buy to let, increased stamp duty and the prospect of interest rate rises.”

“Yet regardless of what happens with Brexit, there remains a massive gulf between asking prices and buyers’ ability to afford mortgages, especially in the south east”, he added.

“The bottom line is we are still not building enough homes to meet population forecasts, even if Brexit leads to a decline in net migration. Whatever happens with prices over the coming months and years, this chronic lack of housing is the biggest issue for the UK’s property market.”

John Goodall, chief executive of buy-to-let specialist Landbay, said: “At a regional level, price rises in London continue to lag behind the likes of the east midlands and east Anglia, a sign that demand in the capital is cooling as many buyers migrate away in search of something more affordable.”

Kevin Roberts, director of the Legal & General Mortgage Club, said the figures provide more evidence of a “subdued” market.

“As far as the mortgage market is concerned, however, it’s not doom and gloom at all. The current low-interest climate coupled with increased lender innovation means we’re seeing more and more buyers take their first steps, with the number of first-time buyers hitting a 12-year high last year,” he added.

The ONS also revealed today that growth in London private rental prices remains sluggish, rising by 0.2 per cent in the 12 months to February 2019, up from 0.1 per cent in January 2019.

London’s private rental growth was the lowest in the country, followed by the north east at 0.3 per cent. It weighed on the UK’s overall figure, which was 1.1 per cent in the 12 months to February 2019.

Co-founder of London rental agency Ideal Flatmate, Tom Gatzen, said: “Broadly speaking, the annual rate of rental growth across the UK remains at its most palatable for the last three years.”

He added: “However, these consistent uplifts, regardless of how marginal, continue to put pressure on the already strained cost of living for tenants across the nation.”

By Joe Curtis

Source: City AM

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London is ‘dragging’ on average house prices across UK’s top 20 cities

UK city house prices rose by 2.9 per cent over the 12 months to January 2019 but London has become a “drag” on the housing market after slow growth in the capital.

The latest Hometrack Cities Index, which looks at house prices across Britain’s top 20 major cities, showed prices are rising fastest at six per cent in Leicester, followed by 5.8 per cent in Belfast and 5.4 per cent in Manchester.

But house price inflation in London was virtually flat at 0.2 per cent, showing the second slowest growth of the 20 cities outside of Cambridge.

Aberdeen was the only city where prices fell, as they dropped 1.6 per cent. The average house price in the Scottish city is down £34,000 from mid-2015, at the time of the collapse in oil prices.

The data showed how the weakest housing markets have the longest sales periods and largest discounts, which is currently Aberdeen and inner London, where discounts on asking prices reach seven per cent on average, with it taking 16 weeks to sell, on average.

Of the 20 cities, three of the bottom four for growth did have the highest average house price still, with London, Cambridge and Oxford all above £400,000, while no other city averaged more than Bournemouth’s £287,700, among the UK’s average of £216,600 in these cities.

“This price growth continues to be driven by affordable locations at the bottom end of the house price ladder and in these slower market conditions, it’s only natural that the more desirable UK cities will see prices growth flatten and the time to sell extend, due to the already inflated price of getting a foot on the ladder there,” said Marc von Grundherr, director of Benham and Reeves.

“Of course, the commitment of investing in the inner London market at present is likely to take a bit more thought than it may have previously, but to label London as a ‘drag’ and to liken the market strength to that of Aberdeen is a tad misleading,” he added.

“Prices are holding firm, transactions are steady and London remains the pinnacle of the UK housing market, having emerged from the negative price trends of the previous year.”

Source: City AM