Has city house price growth peaked?
While city level house price inflation is running at 8.4 per cent per annum compared to 6.6 per cent in May, Hometrack said the year-on-year rate of house price growth masks more volatility in the underlying rate of growth.
Its analysis of Land Registry data found the three-month rate of growth expressed on an annualised basis appears to have plateaued. This is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by almost 20 per cent in August.
Thirteen of the 20 cities monitored by the Cities Index registered a slower rate of growth in Q3 of 2015 compared to Q2.
Average house prices are below the levels recorded eight years ago in nine cities with Belfast still 46 per cent lower than in 2007 followed by Liverpool where prices are still 14 per cent lower over the same period.
House prices have increased by 12.1 per cent in Cambridge over the past 12 months, 11.3 per cent in Oxford, and 11 per cent in London.
Richard Donnell, director of research at Hometrack, said: “It is important not to read too much into one month’s headline results but there are signs that the pace of city level house price growth is likely to continue slowing. There has been a surge of demand since the election in May but weaker mortgage approvals and evidence from survey data suggests less frenetic demand in the final quarter of the year.
“Putting the relative performance of UK cities into wider perspective shows a wide variation in performance from city to city emphasising that there is no single UK housing market – house prices in Belfast prices still remain almost half the level seen in 2007 while those in London are 43 per cent higher. The variation in growth reflects the strength of underlying demand for housing and the health of the local economy with the index throwing light on these localised trends at a granular level.”