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UK city house sales down 2%

May 06, 2016
Although the annual rate of house price inflation has gone up by over 10% in UK cities, sales are down by 2% as the market braces for the potential impact of Britain leaving the EU and stamp duty changes.

Hometrack’s UK Cities House Price Index published in February showed that the number of housing sales over the past 12 months fell by 2% across the UK’s top 20 cities. London has seen a 7% dip in transactions and Cambridge has seen sales fall by a fifth (20%) over the same period. Meanwhile city level house price inflation has increased to 10.2%, up from 8.6% a year ago, largely due to constricted supply. The average UK city house price currently stands at £231,700, ranging from £109,000 in Glasgow to £455,000 across London.   

However, there are signs that the annual rate of growth in high growth cities in southern England is starting to plateau as the level of housing sales slows and affordability pressures on would-be buyers increase. Uncertainty around the so-called ‘Brexit referendum’ is also likely to slow activity further. Questions remain as to the level to which the campaign will influence households’ decision making and overall levels of housing market activity. The Brexit referendum comes at a time when other policy measures such as higher stamp duty for investors and second home owners are expected to impact market activity from investors who accounted for one in five sales in 2015.   

Richard Donnell, Insight Director at Hometrack said, "Slower growth in sales volumes has been a trend seen over the last three years across the high value, high growth cities such as Cambridge, Oxford, Aberdeen and London where house prices have been rising for six consecutive years. High housing and moving costs are limiting access to the market for a growing number of households which, in our view, will result in lower turnover and slower house price growth. The EU referendum adds further complexity to an already complex outlook.”  

Photos:  Top left: House sales fell in the UK's major cities over the 12 months to February 2016; middle left: Richard Donnell.

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