Oxford is one of 13 UK cities experiencing lower growth in house prices than a year ago according to Hometrack

13 cities have a lower annual growth rate than a year ago with London, Bristol and Oxford recording the greatest slowdown as affordability and political uncertainty impact demand.

The average prices of a house in the UK’s largest cities increased by 5.1% in the 12 months to June 2017, but growth in London slowed to 2.6%, the lowest rate for over five years.

The annual growth is down from the 8.8% recorded in June last year although it is still robust in larger northern cities such as Birmingham, Manchester and Edinburgh, according to the figures from the latest Hometrack cities house price index.

Growth in the first half of 2017 ranged from 0.2% in Aberdeen to 6.1% in Birmingham and while price growth is higher in seven cities, the scale of the increases compared to June 2016 are more modest.

Prices in Cambridge were up just 1.9%, in Oxford by 2.1%, in Newcastle by 2.4% and in Aberdeen were down 2.7%.

Sustained house price growth in large regional cities has pushed house prices ahead of their 2007 peak in 16 of the 20 cities covered by the index.

Looking ahead to the second half of 2017 the report suggests that even with a material slowdown in the rate of house price growth across south eastern England, house price inflation is holding up despite the squeeze on real incomes and uncertainty around Brexit.

At the end of 2016 Hometrack predicted that city house price growth over 2017 would be 4% but on current trends the firm now expects this to be closer to 6% or 7%. ‘There remains material upside for house prices outside south-eastern England.

Cities such as Bristol, Oxford and Cambridge are seeing slower growth but this is probably due to prices having risen strongly over the last decade, widening the gap with average earnings and impacting affordability for many people.  Major University towns are also braced for reduced demand from foreign nationals for places in their institutions.

It is worth pointing out for readers’ clarity that the headlines sometimes mask the fact that it is a reduction in GROWTH as opposed to an absolute reduction in house values.  At 2.1% Oxford house prices struggled to keep pace with inflation, but continued to grow ahead of earnings, exacerbating the affordability gap for many people, forcing many to live outside of the City commuting in daily by car, train and bus.