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London house prices on the rise again

Written by: Christina Hoghton
The capital has been through a period of repricing, but average prices are back on the up

London house prices have returned to health for the first time in three years, according to Zoopla.

The rate of property price growth in London has increased to 1% annually, up from -1.1% a year ago, said the property portal.

This is the highest rate of growth in the capital for two years, following a period of year-on-year price falls.

Fewer falls

House prices are registering month on month price falls in less than a quarter of London’s housing markets – down on the 85% of markets registering price falls a year ago and the lowest coverage of price falls since May 2017.

Over three quarters of London’s homes are in markets registering small month-on-month price increases.

The shift in London house price momentum is down to a decrease in the number of new properties for sale, which has restricted supply. This is a trend that has been accelerated by the announcement of the election on 12th December.

Richard Donnell, director at Zoopla, said: “After a three-year repricing process accompanied by a sizable decline in housing sales, the London housing market is finally showing signs of life. The shift in momentum is clear, resulting from a lack of supply, increased sales and more realistic pricing, which bode well for higher sales activity in 2020, rather than a pick-up in house price growth.”

The bigger picture

House price growth across UK cities has picked up to 2.9%, said Zoopla.

However, large regional cities – once the engines of house price growth – are starting to show signs of slower growth.

House price growth since the start of 2017 has exceeded 15% across Edinburgh, Leicester, Manchester and Birmingham, but the pace of growth is slowing. All the cities covered by the index are registering price growth of less than 5% a year for the first time since 2012.

Donnell added: “Market conditions in regional cities have been stronger over the last two years with demand supported by employment growth and attractive housing affordability. The rate of growth is slowing, and all cities are registering annual growth of less than 5%.

“The announcement of the General Election has brought forward the usual seasonal slowdown, but the last few weeks of the year pre-Christmas tend to be much quieter than after Boxing Day, when consumer interest in housing springs back to life.”

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