House Price Growth Narrowing Seen Between Best and Worst in UK

House Price Growth Narrowing Seen Between Best and Worst in UK

House prices for the best performing city grew at close to the same pace in UK as the worst performing, drawing the two closer together. The gap between the two narrowed to the closest level within 15 years according to the latest Hometrack House Price Cities Index.

In the London, house prices grew 14.7% in December compared to December 2013 while Aberdeen grew 13.5% over the total from the previous year.  The average house price in London grew to £403,500 while the average house price in Aberdeen remained at less than half of the capital at £193,800.

The average UK house price for 2014 grew to 8.3% which is almost double the average in 2013 at 4.5%.

The average house price slowed in four of the top five cities over the second half of 2014, which included London, Oxford, Bristol, and Cambridge.  Those cities that had property prices growing at a slower rate picked up the pace in the last half of the year with Aberdeen growing faster than Bristol. Edinburgh also performed well with house prices 10.1% higher in December 2014 than the same month the previous year. This equals the same growth seen in Cambridge.

Hometrack credits the house price growth in Scotland to the outcome of the country’s independence referendum held in September offering buyers the confidence they needed to buy.

Overall the UK housing market growth has slowed down in the last half the year compared to the first half.  The forecast for house price growth in 2015 is less robust than 2014 with an increase expected of 3% to 5%.  The annual house price growth has slowed on month to month comparisons since July 2014 with a peak of 10.2%.

The house price gap between the best and worst is expected to narrow even more in the coming months according to Hometrack.

Richard Donnell, director of research at Hometrack, said “Mortgage approvals have weakened in the last five months, with a knock-on impact on house price growth.”

With the housing market having performed well in 2014 and continued forecast for growth this year, many homeowners will be keen to seek an equity cash release remortgage.  The added incentive of gaining a low interest rate will make a new deal even more attractive.

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