Southern regions see largest house price falls – 8 areas impacted most

While affordability pressures bite, annual house price growth in the UK has come to a “virtual standstill” and unsurprisingly, regions in the south have been impacted the most.

Scotland has seen the largest upward trend with a 1.7 percent growth rate, contrary to the East of England and London, which have seen prices drop by one percent according to Zoopla’s July 2023 House Price Index.

Richard Donnell, executive director of research at Zoopla said: “There’s been a rapid slowdown in house price inflation over the last year, down to weaker demand, more price-sensitive buyers and fewer sales.

“Annual UK house price growth of 0.1 percent is a virtual standstill. This is the lowest annual growth rate for 11 years, since August 2012.”

Mr Donnell added: “There is a clear north-south divide in house price inflation. Every region in the South of England has seen house prices fall by up to -1 percent in the last year.”

READ MORE: Pensioner forced out of retirement to clean houses after mortgage rose by £1,277

Regionally, the research showed the East of England and London faced the largest house price falls of one percent, whilst house prices in Wales, the South West, and the South East fell by 0.5 percent, 0.8 percent and 0.9 percent respectively.

City and town-wise, house prices in Aberdeen dropped the most, decreasing by 1.6 percent, followed by Bournemouth, Cambridge and Portsmouth, with each area seeing prices fall by 1.3 percent, 1.2 percent, and one percent respectively.

According to Zoopla’s index, the areas to see the largest drop in house prices in the last year include:

  1. Bristol -0.3 percent
  2. Oxford -0.3 percent
  3. Belfast -0.5 percent
  4. Southampton -0.8 percent
  5. Portsmouth -1 percent
  6. Cambridge -1.2 percent
  7. Bournemouth -1.3 percent
  8. Aberdeen -1.6 percent

Don’t miss…
Mortgage misery forces widow to sell home and continue working into retirement[INSIGHT]
Interest-only mortgages could worsen crisis of retirees scraping for repayments[ANALYSIS]
Mortgage success: when porting could be the answer – The Crusader[EXPLAINED]

Mr Donnell said: “All other regions and countries of the UK are posting low single-digit house price growth. Scotland is seeing the highest house price growth of 1.7 percent.

“This pattern reflects the greater impact of higher mortgage rates on higher-value housing markets. Buyers in the South of England need bigger mortgages and deposits as well as higher incomes.”

Consequently, Mr Donnell said this “prices more buyers out of the market” in the south, which weakens demand and pushes prices down.

What could happen next?

Looking ahead, Mr Donnell forecasts the number of property sales to “recover well” in the coming two to three years, but price growth will continue to plateau.

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

He said: “More flexible working, demographic trends from an ageing population, the strong labour market and high immigration will all encourage people to move house.

“In terms of mortgage rates, they’re starting to drift lower and we expect them to fall below 5 percent later this year. But it’ll be a drawn-out process, relying on financial markets to evaluate how high-interest rates need to be to bring inflation under control.”

However, any falls in mortgage rates are “unlikely” to impact the market and improve affordability further until at least the first half of 2024.

Mr Donnell said: “This is why we’re less optimistic about house price growth, which looks set to stay within the plus two percent to minus two percent range for the foreseeable future.”

Source: Read Full Article