Leicester the place for rising house prices
27 Sep 2019
Encouraging growth in Midlands cities good news for sellers
The latest AugustUK Cities House Price Index from property portal Zoopla shows city house price inflation slowing to more sustainable levels.
But Leicester is the location topping the table of house price rises over the past year, more than doubling the average growth rate – which is good news for people thinking about putting their home on the market.
At a UK average growth rate of 1.9% the market continues to adapt to changing demand from tax and policy changes affecting cash and mortgage backed purchases. Leicester is out ahead, with price growth in the last year of 4.8%, closely followed by Liverpool at 4.6%.
This is the first time since 2012 that the fastest growth city has a rate of price inflation below 5%.Zoopla’s House Price Indices are based on the largest underlying data sample of any UK house price index. The 20 cities covered by the index contain 35% of the UK housing stock by volume and 43% of capital value.
Average house prices
Average house prices in Leicester currently sit at £182,900, with those in Birmingham at £168,300, 3.8% up on August last year; and Nottingham at £155,300, 3.1% up. The current overall UK average is £220,700, 2.1% higher than in August 2018.
House prices continue to fall in Oxford (0.4%) and Aberdeen (-4%), while the number of cash buyers has fallen in 90% of UK cities since 2016 according to the index.
Changing mix of buyers
By contrast, demand from mortgaged homebuyers continues to grow against a backdrop of weaker house price growth, delivering mixed signals across the UK housing market. Zoopla puts the disparity down to a changing mix of buyers and the variable status of each city’s house price recovery.
New analysis reveals a major shift in the mix of buyers purchasing homes across UK cities. One in four sales are now cash buyers, down from 29% in 2013, with the decline seen most significantly in cities with the highest capital values and lowest yields.
Decline in cash sales
The fall in cash sales has outpaced changes in demand from mortgaged buyers and is a key driver of weaker price growth. The decline in cash buyers is seen largely as a result of the 2016 stamp tax changes impacting investors and second homeowners.
Mortgaged buyer numbers however remain resilient. Data from UK Finance shows mortgage homeowner demand continues to grow year on year, despite weaker house price inflation.
Despite recent price falls, London house prices are 56% higher than during the peak era of 2007and the recent the fall in house prices and sales looks to be bottoming out. House prices grew in London by 0.2% in the 12 months to August 2019.
Shezad Tayub, Director at Online Property Agents says: “These latest figures are very heartening for vendors in Leicester and our other Midlands cities, as well as those in the North.
“Current trends reflect the relative strength of local economies and the demand for and affordability of housing in each city, as well as their attractiveness for easy commuting to London.”
For expert professional and friendly advice on putting your property on the market and homes for sale online contact low cost estate agents Online Estate Agents on 0330 1244 786.
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