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Leicester tops cities for price growth as realism bites in the south

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  • 26/11/2019
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Leicester tops cities for price growth as realism bites in the south
The city of Leicester has recorded house price growth of 4.7 per cent in October, topping Zoopla’s UK Cities House Price Index for the period.

 

House price growth across the 20-city index was 2.9 per cent for the month compared to October 2018 and 1.4 per cent over three months August to October.

The average house price was £254,800, with the highest in London at £476,900 and Glasgow (pictured) the lowest at £123,200.

The second strongest price growth year-on-year was recorded in Manchester at 4.6 per cent, then Liverpool, 4.1 per cent and Edinburgh and Belfast, both at four per cent. 

At the bottom of the index, Portsmouth and Southampton both saw 1.2 per cent growth, London one per cent, Oxford was unchanged, while prices in Aberdeen fell 5.9 per cent.

The UK’s overall price rise was helped by firmer pricing in cities across southern England, most notably in London where prices rose one per cent over the past year.

The growth represented the highest rise for two years and followed a period of modest falls.

 

Realistic pricing

The number of new homes listed for sale by each estate agency branch was the lowest for four years during 2019 but the small increase in sales agreed was helped by realistic pricing. 

“London has been through a three-year repricing process accompanied by modest price falls. In contrast, average values have increased by up to 15 per cent in large regional cities since the start of 2017,” Zoopla said.

The gap between asking price and market clearing price in London has realigned over four years from 15 per cent at the start of 2015 to five per cent today. 

“We expect market conditions in London to improve in 2020 with an increase in housing sales. We expect price inflation to remain in low single digits over 2020,” Zoopla added.

 

North-south divide

The gap between asking and market clearing prices expanded during 2018 and 2019 in other UK cities, however underlying price growth in most cities is now less that five per cent a year. 

Cumulative price growth across Birmingham, Edinburgh, Leicester and Manchester has reached 15 per cent since 2017.

In contrast, prices across Cambridge, London and Oxford have been broadly flat, with falls during 2018. Weak price growth was accompanied by a 25 per cent drop in sales volumes.

 

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