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Annual house price growth ‘running at below 5% across all UK’s biggest cities’

By Vicky Shaw, PA Personal Finance Correspondent

None of the UK’s biggest cities saw annual property growth hitting 5% or more in August – marking the first time this has happened since 2012 as the market adjusts to more realistic pricing, according to an index.

Zoopla’s index, which covers house price movements in the UK’s 20 biggest cities, found that the fastest rate of year-on-year house price growth in August was in Leicester, at 4.8%, according to Zoopla.

It was the first time since December 2012 that the city with the fastest house price growth had an annual rate of price inflation below 5%.

Leicester was followed by Liverpool, where average house prices increased by 4.6% compared with a year earlier, and Manchester with a 4.5% uplift.

Zoopla index
Zoopla’s index shows annual house price movements in the UK’s 20 biggest cities (Zoopla/PA)

The biggest house price fall in August was in Aberdeen, where house prices were 4% lower than a year earlier, according to the cities index.

Oxford also saw house prices edge downwards, with property values there falling by 0.4% annually.

In London, house prices increased by just 0.2% annually, while in Cambridge they lifted by 0.3%.

Year-on-year house price growth was 4.0% in Edinburgh, 4.1% in Cardiff and 3.6% in Belfast.

Richard Donnell, research and insight director at Zoopla, said the housing market is “throwing off mixed signals”.

He said: “This is at a time when Brexit is dominating the headlines again and further complicating the outlook”.

He said southern cities in particular have seen a reduction in cash buyers – “and we believe this is down to a decline in investment-buying across high value cities”.

Mr Donnell continued: “This has compounded the slowdown in price rises, which we see as a return to a more sustainable pace of price growth rather than an impending re-correction.

“The London market continues to see greater realism in pricing and there are signs of a modest increase in market activity.

“This isn’t a precursor to price rises, but we do expect sales volumes to start rising once again.”