The fastest growing UK cities are the most affordable, with four cities including Liverpool, Newcastle, Aberdeen and Belfast, yet to recover to 2007 levels, data from Hometrack revealed.
Hometrack said: “Despite uncertainty around Brexit compounding the market slowdown in London, our analysis of income to buy indicates there is further scope for price growth in the most affordable cities, where prices are currently rising fastest.”
Overall, UK city house price inflation is running at 3.9%, up from 3.6% a year ago, largely driven by accelerating price growth in those affordable cities.
The cities still in negative growth this year – Aberdeen at -3.8%, London at -0.3% and Cambridge at -0.1% – are suffering from both affordability and economic pressures.
Aberdeen has suffered as the oil industry has struggled, with house prices continuing to decline for the last three years. From a recent high of £198,000 in December 2014, average house prices have fallen back to £164,000, a decline of 17%, wiping out similar sized gains made between 2012-2014.
Two weeks ago, governor of the Bank of England Mark Carney said in the worst case scenario a chaotic no-deal Brexit could crash house prices by as much as 35% over three years and send another financial shock through the economy.
National data for housing sales and mortgage approvals for home purchase have remained broadly flat since 2015 and this slowdown has been focused on south eastern England, and primarily London.
Hometrack said: “In our view, the referendum result was a compounding factor for the slowdown in London house price growth since 2015. The primary drivers were stretched affordability, the impact of lending regulations and housing related tax changes, like stamp duty.”