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Property News

UK cities index: Edinburgh still leading the pack

Almost a year ago, Nethouseprices proudly added Scotland to the family of nations covered by our news and house price valuation services. Before then, our affection and admiration for that country knew no bounds but, during the past twelve months, even we have been amazed by the performance of the Scottish housing market and the endless parade of awards that Scotland has won for its quality of life and natural resources. Hometrack is the latest institution to point out the buoyancy of the property sector north of the border, revealing that sold house prices in Edinburgh are rising faster than in any other major UK city. Elsewhere, the index has more encouraging news for London than we have seen in recent months, and the great Northern cities continue to go from strength to strength. In this brief feature, we set out the principal findings of the report.

The headlines

Hometrack found in its March index that:

- Residential property prices in the twenty most economically active UK cities are rising at an annualised rate of 5.5 per cent, up from just 3.7 per cent this time last year. 
- The cost of housing is rising most rapidly in Edinburgh, with that city recording growth of 8.1 per cent in the past twelve months. The news is more sobering for Aberdeen, where prices are falling at a rate of 6.9 per cent annually. Cambridge is the only other major city to report a price dip.
- While the market in London is still sluggish by its own historic standards and in comparison to the growth patterns we are seeing in many other cities, there are signs that "downward pressure" on prices might be easing.

The growth league table: the top spots

As ever with this type of index, the detail is more interesting than the bare headlines. Consider, for example, the actual growth league table for the cities included in the Hometrack study. We have included each city's ranking in last month's index as an added point of comparison.

1. Edinburgh, Scotland

- Average house price = £229,200.
- Annual growth rate = 8.1 per cent.
- Position last month = 1.

2. Nottingham, East Midlands

- Average house price = £148,500.
- Annual growth rate = 8.0 per cent.
- Position last month = 7.

3. Manchester, North West England

- Average house price = £162,100.
- Annual growth rate = 7.4 per cent.
- Position last month = 5.

4. Birmingham, West Midlands

- Average house price = £157,200.
- Annual growth rate = 7.0 per cent.
- Position last month = 3.

5. Leeds, Yorkshire and the Humber

- Average house price = £162,600.
- Annual growth rate = 6.5 per cent.
- Position last month = 6.

6. Leicester, East Midlands

- Average house price = £170,300.
- Annual growth rate = 6.5 per cent.
- Position last month = 4.

7. Liverpool, North West England.

- Average house price = £117,500.
- Annual growth rate = 6.1 per cent.
- Position last month = 2.

8. Sheffield, Yorkshire and the Humber

- Average house price = £134,100.
- Annual growth rate = 6.1 per cent.
- Position last month = 8.

9. Bristol, South West England

- Average house price = £276,800.
- Annual growth rate = 5.8 per cent.
- Position last month = 14.

10 . Cardiff, Wales

- Average house price = £199,600.
- Annual growth rate = 5.6 per cent.
- Position last month = 9.

Edinburgh, then, seems to be firmly embedded as the UK's most vibrant city housing market. In fact, the most recent Office for National Statistics index of sold property prices suggests that Hometrack might even be understating growth in the city: readers might remember that the ONS report found that the cost of homes in Edinburgh is actually rising by more than 11 per cent annually. These levels of growth tend to raise questions about sustainability. Nethouseprices wouldn't necessarily expect prices to continue rising at quite this rate, but the fundamentals in Scotland generally, and Edinburgh in particular, are so strong that we anticipate continued growth in the next few months. 

The growth league table: how the rest fared


11. Portsmouth, South East England

- Average house price = £235,300.
- Annual growth rate = 5.5 per cent.
- Position last month = 10

12. Bournemouth, South West England

- Average house price = £285,600.
- Annual growth rate = 4.6 per cent.
- Position last month = 12.

13. Southampton, South East England

- Average house price = £227,700.
- Annual growth rate = 4.4 per cent.
- Position last month = 16.

14. Belfast, Northern Ireland

- Average house price = £135,600 
- Annual growth rate = 4.4 per cent.
- Position last month = 15.

15. Newcastle, North East England

- Average house price = £126,300.
- Annual growth rate = 3.9 per cent.
- Position last month = 11.

16. Oxford, South East England

- Average house price = £418,400.
- Annual growth rate = 3.9 per cent.
- Position last month = 18.

17. Glasgow, Scotland

- Average house price = £118,600.
- Annual growth rate = 2.5 per cent.
- Position last month = 13.

18. London

- Average house price = £490,900.
- Annual growth rate = 1.6 per cent.
- Position last month = 17.

19. Cambridge, East of England

- Average house price = £428,900.
- Annual growth rate = -1.2 per cent.
- Position last month = 19.

20. Aberdeen, Scotland

- Average house price = £162,600.
- Annual growth rate = -6.9 per cent.
- Position last month = 20.

Occupying these last few spots will no doubt be disappointing to homeowners in these cities: we all like to sold property prices rising in our areas. There are two important points to be made, though. Firstly, London's fortunes seem to be turning at last, with annual growth of 1.6 per cent being a distinct improvement on the 1.0 per cent reported in the February index. It's too early, of course, to say with confidence and certainty that the capital is set for a real upturn, but this index - and several others - do suggest that the sector has bottomed out and will slowly gather some momentum. And secondly, Aberdeen's situation is rather more nuanced than it might seem from its position in this table: the pace of decline is slowing markedly. Watch out for our upcoming analysis of housing in the granite city.

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Source: Nethouseprices.com 08.05.18

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