London falls behind five cities for house price growth

London is lagging behind Edinburgh, Glasgow, Southampton, Bristol and Birmingham.

London is lagging behind five major UK cities in terms of house price growth, according to the latest Hometrack House Price Index.

While prices in the capital have risen by an average of 0.5% in the past quarter, price growth was faster in Edinburgh, Glasgow, Southampton, Bristol and Birmingham.

Peaks and troughs

Scotland’s two biggest cities have seen above average growth owing to a post-referendum increase in demand, with Edinburgh at 1.8% and Glasgow at 0.9%.

City	Average growth per month in last three months
Edinburgh	1.8%
Glasgow	0.9%
Southampton	0.8%
Bristol	0.7%
Birmingham	0.6%

Meanwhile, the most significant recent reversals have been seen in Aberdeen (-0.4%), Cambridge (-0.2%) and Liverpool (-0.1%).

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The bigger picture

House prices have risen above their 2007 peak in eight cities but, despite a recent slowdown, London (30.5%), Cambridge (28.7%) and Oxford (21.9%) are still leading the way:

City	Average price	Relative to 2007 peak	Relative to recent trough	% year on year
London	£403,200	30.5%	55.1%	16.4%
Aberdeen	£195,200	13.6%	30.3%	14.3%
Bristol	£218,600	9%	34.7%	13.8%
Cambridge	£338,500	28.7%	55.1%	13.4%
Oxford	£340,700	21.9%	45.4%	10.2%
Southampton	£192,300	5.3%	25.9%	10.1%
Edinburgh	£196,900	-4.8%	15.3%	9.5%
UK	£185,900	1.1%	19.2%	8.9%
Portsmouth	£195,200	4.8%	23.9%	8.8%
Belfast	£115,500	-50%	12%	8.4%

This works out at an average annual increase in London property values of £57,000, which is nearly four times the national average of £15,200 and nearly double the UK’s average income. At the other end of the scale. Liverpool showed the lowest increase in values with just £3,000 added to house prices in the last year.

Hometrack is predicting that UK house prices will grow by 2% over 2015.

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