Property markets in Edinburgh and Glasgow experienced a post-referendum bounce, according to new research, as the ending of uncertainty over Scottish independence helped the two cities record the fastest price rises in the UK over the past three months.
But in other parts of the UK there were further signs that the boom of the first half of the year had fizzled out, the data from property firm Hometrack showed. Prices in former hotspots Aberdeen and Cambridge fell over the three months and in London they rose only 0.5%.
The latest City House Price Index showed that across the board prices were up by 8.9% over the past year, but the monthly rate of growth has slowed to a crawl. In the three months to 30 November prices rose by 0.4% to an average of £185,900.
The index, which is based on Land Registry data for sales for 20 cities, representing 40% of the UK’s housing stock by value, showed prices in Edinburgh and Glasgow rose 1.8% and 0.9% respectively over the three months. Hometrack said this had been driven by demand returning to the market after September’s referendum vote against independence. In the run-up to the poll there had been reports of a slowdown in the local housing market as homebuyers waited to see if Scotland remained part of the union.
In Aberdeen prices fell by 0.4% over the quarter, the steepest falls of any of the cities in the study. Its role as a base for oil workers has long given its housing market a climate of its own and the price falls may reflect the weakening oil price. Despite recent drops Aberdeen’s average price remains 14.3% higher than this time last year, at £195,200.
Cambridge, another city where prices raced away in the early months of the year, recorded a 0.2% fall over the past three months but an annual rise of 13.4% to £338,500. In Liverpool, prices were down by 0.2% over the quarter and up by just 3% year-on-year at an avarege of £107,000.
Hometrack’s research director, Richard Donnell, said: “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 largest annual rise has been in London, where homes are changing hands for an average of £403,200, 16.4% or £56,900 more than a year ago. Much of this growth came in the first half of the year, when tales of frenzied bidding for properties were commonplace.
Donnell said the recent slowdown in London would act as a drag on the UK rate of house price growth over the next 12 months. As a result, Hometrack is predicting price rises of just 2% in 2015.
Edinburgh was also one of the top five most desirable places to live according to a poll by property website Rightmove. But seaside towns topped the list, with St Ives the most popular, followed by Poole and Brighton.
The Cornish town, which boasts a branch of the Tate as well as the famous open-air Minack Theatre, topped a list of locations in a poll of 2,600 people who were asked where there ideal home would be. The desirability of the town has already helped push asking prices up by 7.6% over the past year, to an average of £375,383.
Further evidence of the wider slowdown came in mortgage lending figures for November that showed a 9% drop in the amount advanced during the month. The Council of Mortgage Lenders (CML) said gross mortgage lending had fallen to £16.9bn – the lowest figure since April and equal to the sum advanced in November 2013.
CML economist Mohammad Jamei said: “Current activity in the housing market has eased with transactions back down to levels seen almost a year ago. The reform in stamp duty is likely to provide a modest short-term boost in activity over the next few months, but its impact will fade away in the medium term.”
