New data shows house price momentum in Scotland and the North in the second half of 2014
House price growth sped up in Scotland and parts of the North of England in the second half of 2014 as the north-south divide begins to narrow.
Homeowners in Edinburgh, Aberdeen, Glasgow and Newcastle saw a reversal of fortunes as values picked up in the last six months of the year, while the market continued to cool in Oxford, London, Cambridge and Bristol, according to new data from Hometrack.
In total, 11 cities in the UK recorded an acceleration in annual house price growth from July to December, while house price inflation slowed in seven cities, the industry body reported.
The Scottish housing market, dominated by Edinburgh, slowed in the run up to the independence referendum – held in September – before accelerating in the final three months of the year.
Annual house price growth in Edinburgh more than doubled from 4.4pc to June to 10.1pc to December.
Aberdeen and Glasgow also saw an increase in the annual rate of inflation from 7.8pc to 13.5pc and 2.2pc to 5.3pc, respectively.
“There is no doubt that after the referendum there was an upturn in activity and prices,” said Andrew Perratt, head of Scotland and the North at Savills. “People were holding off making a decision [on moving] until after the vote.”
Rising prices were not restricted to Scotland.
Relatively untouched by the London-led recovery of 2014, the housing market in Newcastle finally started to gather momentum with annual growth rate speeding up from 4.3pc to June to 6.7pc to December. Leicester also recorded an acceleration in values and transaction levels, as economic confidence spilled out into the regions.
However, following a surge in house price growth in the first half of 2014, demand fell in parts of the south.
Property owners in Oxford experienced the greatest slowdown in annual growth rate from the first half to the second – falling from 15.9pc to 11.9pc.
London’s yearly rate peaked at 18.9pc in July following the release of pent up demand from domestic and foreign buyers, but tighter mortgage regulation and over-inflated prices led to a more muted autumn and winter.
Belfast also saw a slowdown in house price growth while Leeds was the only northern city to see a decrease.
“House price growth looks set to converge further in the first half of 2015 as high growth markets start to see growth plateau, said Richard Donnell, director of research at Hometrack.
“Pent up demand has fed back into the market in the last two years, supported by record low mortgage rates, but mortgage approvals have weakened in the last five months with a knock on impact on house price growth.”
Mr Perratt added that the exodus of Londoners out of the capital, searching for better value for money, was continuing to have an impact on other regions.