Recent Hometrack figures have shown that UK city house price inflation has slowed to 5.4% as weak house price growth in London offsets above average growth rates in large regional cities.
According to Hometrack's data, the gap between asking and achieved prices is widening and sellers are having to accept larger discounts.
In 2014 the average discount from listing price across London was just 0.5%. Today this has widened to an average of 4% with the largest discounts of up to 10% being registered in inner London where price falls are most concentrated.
The converse is true in large regional cities such as Edinburgh, Birmingham, Manchester and Glasgow where the advantage has shifted towards sellers as the discount from the asking price to sale price continues to narrow.
Birmingham and Manchester have seen the discount more than halve from 6% in 2013 to just 2.7% in 2017 and a similar pattern has been recorded in cities outside southern England.
In terms of year-on-year house price growth, Edinburgh is the UK’s fastest growing city at 8.2%, followed by Birmingham at 7.5% with Manchester and Glasgow also registering growth in excess of 7%.
The annual rate of house price growth is negative in Oxford (-0.9%), Cambridge (-1.4%) and Aberdeen (-9.9%) as weaker demand and economic factors results in lower prices.
The gap between the annual growth rate in London and the average across the large regional cities of Birmingham, Manchester, Edinburgh and Glasgow is now at its highest since September 2005.
Richard Donnell, Insight Director at Hometrack, said: “The level of discounting provides insight into the strength of underlying demand for housing across UK cities. Asking prices tend to act as the ‘shock absorber’ to softer pricing as demand weakens. However, once discounts get close to 10%, this is when falls in headline prices start to occur.
These results confirm our view that the housing market is following the pattern registered in previous housing cycles with high rates of growth in London over the first half of the cycle being followed by low growth and an acceleration in regional housing markets as prices recover off a low base. We appear to be at this transition period once again. The gap between the annual growth rate in London and the average across the large regional cities of Birmingham, Manchester, Edinburgh and Glasgow is widening and at its highest since September 2005.”