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Tuesday, 28 November 2017

Upside funk

Affordability declines

UK City house price inflation increased to +6.1 per cent in October 2017, up from +5.4 per cent a year earlier.

It's the fastest rate of growth since September 2016, according to Hometrack's latest figures. 

Manchester now has the fastest rate of growth, at +7.9 per cent, while Aberdeen continues its decline.

Source: Hometrack

In London, the house price to earnings ratio rose to 14.5 times, an all-time high, while Cambridge is not far behind. 

In Bristol, the ratio is now 9.7 times and rising. 

Prices in both Cambridge and London have increased by +60 per cent since 2007.

Hometrack sees furthers upside for the regional cities:

"Were cities such as Leeds, Manchester and Birmingham to see the price to earnings ratio reach 30% over the 15-year average, this would equate to a house price increase of 20% to 25%. 

We believe this is very feasible so long as mortgage rates remain low and the economy continues to grow. 

These increases are equivalent to 3 years of growth at current levels."