Key UK Cities See Year on Year Price Increase - Nova
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In the 12 months to August 2018, key UK cities experienced property price growth of 3.9%. The fastest growth being centred generally around cities with the most affordable values.

That figure is a UK average, and the growth was indeed quite varied. Liverpool led the charge growing by 7.5% while Aberdeen performed worst with a 3.9% decline.

Second and Third were Glasgow (7.2% growth) and Nottingham (6.9% growth). These two cities are among the most affordable and the average prices are actually just now returning to pre-credit-crunch levels. In fact, property prices in only four cities remain below 2007 levels: Liverpool (down 4%), Newcastle (down 2%), Aberdeen (down 4%), and Belfast (down 41%).

Chief Executive Officer of Yomdel, Andy Soloman, has expressed that a No Deal Brexit could have a substantial impact in the economy, but until then the property market in the major cities of the UK will remain fairly robust and continue to see price growth. There are two drivers to this: the low interest rate environment in which we find ourselves, and the significant undersupply of housing UK-wide.

The worst-case scenario, reported by the Bank of England recently, is driven by an increase in interest and therefore mortgage rates. The housing market is quite sensitive to interest rates increasing, particularly in the south where we have seen a direct impact on how much buyers are prepared to pay.

‘It will also have an impact on what investors are prepared to pay for housing. An increase in borrowing costs will mean they have to adjust the yield they want from housing by paying less for a home assuming no change in rent levels,’ the Hometrack report explains.

‘So far, Brexit has compounded the London slowdown. National data for housing sales and mortgage approvals for home purchase have remained broadly flat since 2015. The slowdown in sales volumes and house price inflation has been focused on south eastern England, and primarily London,’ it points out.

‘In our view, the Referendum result was a compounding factor for the slowdown in London house price growth since 2015. The primary drivers were stretched affordability, the impact of lending regulations, loan to income thresholds and affordability testing, and housing related tax changes such as stamp duty,’ it adds.

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