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House prices in five of the main UK cities are now rising twice as fast as wage inflation.

Figures from property data company Hometrack show average house prices in the top 20 biggest UK cities were up 3.2% annually in September to £217,500.

Prices are rising fastest on an annual basis in Liverpool (6.9%), followed by Birmingham (6.5%), Leicester (6.4%), Manchester and Glasgow (6.2%).

Hometrack said this level of growth has made it tougher for buyers as wage inflation is at just 2.7%.

Meanwhile, Hometrack analysis found prices in almost two-thirds (63%) of London local authorities have fallen annually, but the proportion of markets in the capital registering a decline in values is now lower on a monthly basis.

Average prices fell in 29 local authorities covering London and the commuter belt over the past 12 months, with the wealthy borough of Kensington & Chelsea suffering the worst year-on-year fall, down 4.9% to an average of £1.17m, Hometrack says.

However, the number of London postcodes registering month-on-month price falls has dropped to 44% from a peak of 70% in December 2017, meaning 56% are now registering gains.

Hometrack said this implies the proportion of markets registering annual price falls will slow further over the rest of the year.

Richard Donnell, insight director at Hometrack, said: “City level house price growth remains well above average in the most affordable cities.

“While the rate of growth has moderated slightly, prices in five cities are still rising twice as fast as the growth in earnings.

“We expect continued price growth in the most affordable markets over the remainder of the year.”

Source: Property Industry Eye

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