Hometrack has revealed that UK city house price inflation in June was 4.6% year-on-year, ranging from +7.6% to -2.8%.

The three-month growth rate in London has increased as sellers become more realistic on pricing. The discounts from asking prices in London are narrowing (for the first time in two years) which Hometrack says is a positive for sales volumes.

Meanwhile, Manchester has the lowest level of price discounting and the highest annual growth rate (7.4%), followed by Liverpool (7.2%), Birmingham (6.8%) and Leicester (6.5%).

House prices are falling in real terms across six cities (growth below the 2.4% rate of consumer price inflation) – Southampton, Oxford, Belfast, London, Cambridge and Aberdeen.

Steve Seal, director of sales and marketing at Bluestone Mortgages, said: “With distinct regional differences, it’s challenging to find a ‘one size fits all’ approach to tackling varying housing need. Strategies aimed at building more affordable housing should be supported throughout the country, but in areas like London, and for first-time buyers, more help is required.

“Investment in government schemes have set the ball rolling, however for self-employed borrowers, contractors and entrepreneurs, this growing group of the UK workforce still struggle to make that first step. The specialist lending market remains vital in providing these consumers with a helping hand and is committed to securing their homeownership aspirations.”