Looking to invest in city property? Don't rush to London. According to Hometrack's latest UK Cities House Price Index, there are more fruitful options elsewhere.
What’s the latest?
London's long-time crown as the undisputed leader in UK house price growth is showing distinct signs of slipping.
According to property analysis firm Hometrack, prices in the capital climbed just 3.5% in the 12 months to April. This compares to 13% recorded a year ago and marks the slowest rate of growth for five years.
Hometrack's index – which examines selling prices over a 12-month period across 20 UK cities – now ranks London in an unremarkable 17th place.
What's more, it predicts that growth in the capital will slow further – to between 2-3% by the end of the year.
Cities in the Midlands and north of the country are taking up the mantle instead, the research found.
Now it's Manchester that tops the tables for fastest rate of house price growth. Property prices in the city climbed by 8.4% in the year to April, up from last year's result of 6.3%.
It's followed by Leicester, Birmingham (both 7.7%) and Nottingham (7.2%).
Why is this happening?
A growing lack of affordable homes in pricey southern cities is one of the main drivers, according to Hometrack.
House price deceleration is also resulting in weaker levels of demand from homebuyers and investors – a trend which Hometrack expects to continue.
A spokesman said: "House price growth is losing momentum in cities across southern England where housing unaffordability is at a record high and has priced large numbers of households out of the market.”
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Who does it affect?
If you've been waiting in the wings for your chance to get on the London property ladder, the news could present a breather in which to take action. That said, it's important to note that the research refers to house price rises slowing and not the value of property falling.
Existing homeowners in Manchester as well as Leicester, Birmingham and Nottingham, could also be set to benefit from the turning tables. The rise in value of their homes has now overtaken Bristol and London.
Manchester also showed a relatively tight housing supply which puts continued upward pressure on house prices, says Hometrack.
But average house price growth across all 20 cities has slowed. It's now trending at 5.3% compared to 8.7% in April 2016.
Top 3 takeaways
- Price growth in London is the slowest for 5 years at 3.5%, compared to 13% in April 2016
- Manchester is now leading the way with year-on-year price growth of 8.4%
- Across the 20 UK cities recorded, average growth is 5.3%, down from 8.7% in April 2016
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Below: Hometrack's UK Cities House Price Index