London’s house price growth has left it languishing behind UK rivals on a global index compiled by Knight Frank.
London house price growth was just 2.9 per cent in the year to September 2017, leaving it in 96th position in the ranking published today. The overall index grew by 4.7 per cent, down from growth of 5.8 per cent in the prior quarter.
Meanwhile, Nottingham, Edinburgh, and Birmingham posted growth of 9.5 per cent, 8.9 per cent and 7.1 per cent respectively. House prices in Reykjavik recorded a staggering 21 per cent growth, putting the city at the top of the rankings.
Kate Everett-Allen, head of international residential research at Knight Frank, said: “Analysis of real house price growth, when inflation is stripped out, shows Asian cities were the strongest performers over the five-year period.
“The Chinese city of Shenzhen recorded the highest increase of 116 per cent over this period in real terms.”
Data from Rightmove has found that falling prices in Zones 2 and 3 have dragged down house prices in the capital. Year-on-year house prices fell by 3.5 per cent in January, meaning houses in the capital were an average of £21,000 cheaper. In Zone 3, house prices were down by 7.7 per cent and in Zone 3, they fell by 6.4 per cent.
Transactions also cooled, down by 5.5 per cent in the final quarter of 2017. Economists have said the fundamentals of the housing market have weakened, with inflation outstripping wage growth. The government has attempted to stimulate the housing market by cutting stamp duty for first-time buyers. However, analysts have said the move will not make it much easier for would-be homeowners to save for a deposit.