The latest data and analysis on city housing from Zoopla has revealed that average house prices are 2.9% higher than in January 2018 despite a slowdown in the annual rate of growth as a mix of affordability pressures and uncertainty.
According to the report, the sharpest slowdown in growth over the last 12 months has been registered in Edinburgh, Bournemouth, and Portsmouth
Asking price discounts vs time to sell
Despite slower growth, the latest index report sets out new analysis for the time to sell and the discount to asking price across UK cities. This shows that underlying market fundamentals remain strong across 12 cities, primarily large regional cities outside southern England. Nottingham has the strongest market conditions where the average time to sell is less than 8 weeks and sellers are accepting a 2.2% discount to the asking price – equivalent to £3,340.
Zoopla found that the weakest market conditions are in London and Aberdeen where discounts are over 5% and the average time to sell is over 3.5 months. Market conditions in Aberdeen remain weak as a result of the fall in the oil price and average home values are £34,000 lower than mid-2015.
Across London as a whole, the gap between asking and sales price has widened from just 1% three years ago to 5.1% today equivalent to an average discount of £24,500. Discounts are largest in inner London where price falls are most concentrated.
Richard Donnell, Research and Insight Director at Zoopla, said: “Underlying market conditions remain strong in regional cities with the discounts from asking prices continuing to narrow as low mortgage rates and rising employment continue to stimulate demand for housing.
However, the speed of price growth has moderated on affordability pressures and increased uncertainty. Thirteen cities are recording weaker annual house price growth than at the same time a year ago. Some of the sharpest slowdowns in annual house price growth over the last year have been registered in Edinburgh, Bournemouth, Portsmouth and Bristol.
The current housing cycle started almost a decade ago and is unfolding at different speeds across each city driven by local factors, primarily growth in incomes and employment and overall levels of housing affordability.
Three years ago London house prices were rising in double digits and the discount to asking price was just 1%. Affordability pressures and tax changes have impacted demand for housing and the result has been a widening in discounts from asking prices as a result of price sensitive buyers and sellers reluctant to provide significant discounts.”