Where to buy next: the winners and losers of UK house price growth

Landlords may be better off looking outside of London to build on their rental portfolio as staggering house price growth pushes investors outside of the capital.

Research suggests London has fallen out of favour with buyers put off by an average 13 per cent house price growth across the city over the past year. According to Halifax, the UK’s biggest mortgage lender, the borough of Greenwich alone saw the average house price rise over 24 per cent in 2014 from £263,183 to £328,044.

This is supported by data from online estate agents eMoov.co.uk, which monitors property demand in the UK based on the number of homes sold versus the number on sale.

It found demand across the UK has dropped by 8 per cent since February, but over the same period demand in London fell 28 per cent.

Away from London and the South, house prices are continuing to rise from a low base. Halifax says Sheffield has seen the best house price growth outside the South with house prices rising by almost 14 per cent over the past year. The lender says demand has been boosted by a significant increase in employment, particularly for managerial, professional and technically skilled roles.

Bury in Lancashire, Keighley in West Yorkshire and Nuneaton in Warwickshire recorded the largest price falls of between 3 and 5 per cent.

Property research firm Hometrack says Edinburgh, Glasgow, Southampton, Bristol and Birmingham all saw higher price growth than London over the past three months.

The greatest price falls Hometrack recorded were in Aberdeen and Cambridge, though the figures also pointed to a “pronounced slowdown” in Oxford, Cardiff and Bournemouth.

Hometrack research director Richard Donnell says: “The high growth cities over the last year are now recording the fastest slowdown and this is most pronounced in smaller cities such as Cambridge and Aberdeen. The Aberdeen economy is closely related to the health of the oil industry and a weakening oil price is impacting the housing market.

“The slowdown in London will act as a drag on the UK rate of house price growth over the next 12 months. The rate of growth in house prices is starting to lose momentum across other cities in southern England, while across the rest of the country modest levels of house price appreciation continue as prices rise off a low base.”

Natalie Holt