UK city house price inflation increases to 6.1% with robust growth in regional cities.
The house price to earnings (p/e) ratio in London is 14.5x. Three other cities have a ratio over 10x.There is further upside for house prices in large regional cities of up to 25% if affordability levels rise over the long run average. In London the p/e ratio is expected to drift lower.

City house price inflation is 6.1% as price growth picks up speed, driven by regional cities where affordability levels, measured on a price to earnings basis, are in line with the 15-year average. In London affordability is at an all-time high of 14.5x earnings.Headline growth up to 6.1%UK City house price inflation has increased to 6.1%, the highest rate of growth since September 2016 and above the UK average growth rate (4.7%). House price growth remains robust in regional cities where affordability levels remain attractive and unemployment continues to fall.Manchester fastest growing cityManchester (7.9%) and Birmingham (7.3%) are registering the fastest rate of growth. House prices in Aberdeen continue to fall (-3.1%) while the rate of growth across London continues to stabilise (3.0%) supported by tightening supply and lower turnover.Price to earnings ratio in London reaches 14.5xThis month we have updated our annual analysis of housing affordability. This reveals the house price to earnings ratio in London has reached an all-time high of 14.5x (fig. 2). Oxford, Cambridge and Bournemouth also have double digit price to earnings ratios. Strong house price inflation in Bristol has pushed the ratio to 9.7x.  These cities have affordability ratios that are 20% to 40% higher than the 15-year average (fig.3). Three cities with ratio below long run averageThree cities have house price to earnings ratios below the 15-year average – Glasgow, Liverpool and Newcastle. These cities have registered well below average house price growth over the last decade, although house price growth has started to accelerate.
Source: Hometrack House Price Indices