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How house prices have changed in Bristol over the last two years 

Eddison Wells is privileged to have an office in Bristol. As a Bristol Mortgage Broker we have the opportunity have a drink in The Pumphouse and watch the boats sail by.

According to the Hometrack UK Cities Index, Bristol city has been experiencing a slowdown in price growth over the past two years. From late 2015 to 2016, the city was a top property hotspot, overtaking giants such as London regarding house price growth. For instance, in April 2016, the city's year-on-year growth was reported at 12.9 percent.

However, in a dramatic turn of events, the year-on-year growth for 2017 stands at a mere 5.9 percent. The sharp decrease of the value is a clear indicator that a large number of buyers have been priced out of the real estate market in Bristol. The housing turnover across Bristol City has fallen by at least 17% since the beginning of 2015.

House prices are still low in Bristol city

Compared to other cities, the price of a house in City remains low. Currently, the average home price in the city is £268,400. The affordability growth in the city was stretched following a tremendous growth of the town before the Brexit campaign came up.

This trend isn't unique to Bristol alone. The same pattern has been reported in all the major cities in the south. The rate of price growth in some of the cities regarded as unaffordable such as London, Cambridge, and Oxford have dropped from double digits in the past two years.

For instance, London has recorded the slowest price growth over the past five years standing at a mere 3.5 percent down from 13.5 percent in April 2016.

What led to the slow growth?

The report by Hometrack UK Cities points at two major factors as the primary cause of the decrease in price growth in the Southern Cities. One was the drop in investor demand. This was as a result of tax amendments that led to the hiking of the stamp duty rates on second homes.

The second factor that led to the decrease in the price growth especially in 207 was the Brexit negotiations that led to the Brexit referendum. According to real estate experts, the negotiations and the vote was the leading factor that had the greatest impact on buyer sentiment. This, combined with affordability issues is what led to the decreased annual growth rate in the last 12 months.

A weakened Pound

The value of the Pound was on the downfall following the Brexit referendum. As a result, the citizens were exposed to higher prices of food and clothing. Unfortunately, the prices were rising faster than their wages. The result of the inflation was the loss of interest in buying of houses.

Overall, the house prices in the UK have been on the decline over the past one year. Although the inflation slowed, it still stood at 5.3 percent in April 2017, down from 8.7 percent in April 2016.

However, the trend in the North is different. For instance, Manchester experienced the fastest price growth over the past one year with a growth rate of 8.4 percent representing an increment of 2.1 percent from the 6.3 percent recorded last year. Birmingham, Leicester, and Nottingham all recorded a price growth rate of over 7.0 percent.

London is in the fall as well

Real estate experts in London are anticipating for the first real terms drop in prices over 2017 since 2011. However, they are also expecting a continuous growth of house prices in most cities located outside southern England as the numerous households will be rushing to take advantage of the low mortgage rates and an anticipated economic growth. This won't be the case in Bristol until early 2018.

Experts are of the opinion that Bristol City will continue experiencing the same trend of house price growth losing momentum for as long as the housing unaffordability is set a record high. This trend is set to affect Bristol and all the other southern England cities.

The other cities are set to continue experiencing a scarcity of homes for sale which will keep driving up the home prices in the longer term. The availability of home for sale will also remain constrained which is expected to continue straining the market prices in places where affordability remains attractive such as Leicester City.

Expect a Rapid Growth in 2018

Indicators are pointing to an improved house price growth in Bristol and other leading cities across the UK. The property analysts Hometrack are predicting a six to seven percent overall increase by April 2018. The figures are slightly higher compared to what the analysts predicted in December last year. Despite the uncertainties surrounding the Brexit, expectations among investors and property managers remain high.

In fact, Hometrack is expecting the growth to kick off as early as December this year before it reaches the peak in 2018. Some of the other cities which have been touted to record tremendous house price growth in 2018 include London, Oxford, Birmingham, and Leeds.

Just like London and Oxford, Bristol city Bristol city experienced a slow house price growth and low mortgage rates last year. However, the falling unemployment rate in the city is expected to support the expected price growth.

Increased Number of Mortgages Approved by lenders

The Real estate market in the country has remained more buoyant in leading cities since the Brexit vote as the home prices continue to soar high. However, there seems to be light at the end of the tunnel as mortgage approvals from British Banks hit a five-month high in August.

According to the statistics published by the bankers, lenders approved 41,587 mortgages for house purchase in August. This was a 9% increase from the 40, 385 approved mortgages in July. It is expected the high levels of employment and the low mortgage rates will push the prices high. However, experts are still warning of weaker spending power among the consumers.