The key UK cities with the highest and lowest price growth are both located in Scotland, according to the latest house price index.
Indeed, the Zoopla index, powered by Hometrack, points to price rises of 5.8% in Edinburgh as well as falls of 4.8% in Aberdeen over the past 12 months.
Meanwhile, Liverpool matched Edinburgh with rises of 5.8%, while Cardiff and Leicester each saw prices go up by 4.4%. Elsewhere, prices in Manchester increased by 4.3% and Nottingham and Belfast both saw prices rise by 4%.
In the year to July 2019, price growth in Oxford fell by 0.4%, while prices in London remained unchanged year on year. The index also shows a minimal rise of 0.2% in Cambridge and 0.6% in Portsmouth.
Previous indexes suggested that there was a weakening of market conditions in Birmingham, and the latest figures show a noticeable slowdown in growth as supply begins to strengthen against demand. The UK’s second largest city is now ninth in the annual growth rankings at 3.5%.
Overall there are 12 cities which have seen inflation fall below the growth in average earnings, currently at 3.7% nationally. Leicester, Nottingham, Sheffield and Glasgow have all seen growth slow down over the past 12 months.
The index report also looks at affordability, and says that after Belfast’s spectacular boom and bust in house prices, the price to earnings ratio has stabilised at five times while Edinburgh at 7.4 times and Cardiff at 7.2 times, have ratios that have tracked the UK average over time.
London’s affordability continues to improve from its high of 14.1 two years ago, and is now down to 13.1. Based on this measure, affordability is back to the level last seen four years ago. However, despite this modest improvement, the London ratio remains relatively high, well above the 20 year average of 9.9 time.
Southern England is seeing slow improvement when it comes to affordability, with both Oxford and Cambridge following similar trends to London. Meanwhile, Bournemouth, Southampton, Portsmouth and Bristol have the next highest affordability ratios of 7.5 time to 9.7 time. Belfast, Aberdeen, Glasgow and Newcastle are the only cities with ratios that are still below the 20 year average.
The report says that consumer confidence and market sentiment are largely responsible for dictating how fast attractive affordability feeds into house price inflation. ‘House price growth has slowed more recently on weaker activity and increased uncertainty over the near term outlook. This is likely to build further over the autumn until there is greater clarity over the Brexit process and the implications for the economy,’ it adds.
According to Marc von Grundherr, director of agents Benham and Reeves, housing affordability remains an issue for people within major cities who are looking to get on the property ladder. Despite wages generally higher in these locations, home ownership remains difficult to obtain.
‘We have seen this improve as a result of healthier wage growth of late, but in cities with the largest property price tags, this improvement in earnings proves insignificant when compared to the continued financial hurdle posed by robust property values,’ he said.
‘For those in London, Cambridge and Oxford, the task is that much tougher, not only because of the high price of property, but because of the huge additional sums faced via stamp duty. Despite the relative affordability of current mortgage rates, these additional charges continue to be one of the biggest deterrents for those looking to buy in our major cities and this, in addition to current market uncertainty, is causing a drag in the rate of house price growth,’ he pointed out.