Sellers in southern England are having to accept greater discounts on their asking prices to achieve a sale, according to the latest Hometrack price index. At the same time, stronger market conditions in the midlands, northern regions and Scotland mean the gap between asking price and actual price is shrinking.
The largest discounts are to be found in London, Oxford and Cambridge, of up to 4.7% on average, but the data reveals the gap is starting to increase in Bristol, Portsmouth and Southampton.
Aberdeen is something of an outlier as it is seeing the largest discounts of all at almost 9.6%. Over the last year prices have fallen by 7.2% in the coastal city and by almost 20% since 2014 when the price of oil went into reverse and impacted the demand for housing.
Overall city house price inflation slowed to 4.9% in April with average values in London increasing by just 0.8% over the last 12 months. This has been compounded by below average growth in cities across southern England, whereas cities further north, such as Manchester, Leicester and Edinburgh, are seeing higher than average house price growth.
These cities appear less susceptible to the external economic factors that have weakened demand in southern England, including affordability, tax changes and Brexit uncertainty.
Richard Donnell, Insight Director at Hometrack commented:
“The strength of house price growth and level of discounting from asking prices reveals how the current housing cycle continues to unfold. The overall pace of overall city level growth has lost momentum as a result of virtually static prices in London and slower growth across southern England.
"Weaker consumer confidence and modest increase in mortgage rates are also impacting demand and mortgage approvals for home purchase have drifted lower in the last quarter. The cities index reveals, how macro and local factors such as the strength of the local economy and the relative affordability of housing are influencing the pace and direction of house price growth.”