Gap between asking price & sale is growing in the South - but shrinking in the North

In the south of England, the largest discounts are in London, Oxford and Cambridge, of up to 4.7% on average, but the latest data reveals the gap is also starting to increase in Bristol, Portsmouth and Southampton as affordability pressures increase.

Overall city house price inflation has 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 hour price growth.

These cities have not been hit by external economic factors that have weakened demand in southern England, such as affordability pressures, tax changes and Brexit uncertainty. As a result, sellers in large cities outside of the South of England are getting smaller discounts to the asking price to achieve a sale.

Richard Donnell, Insight Director at Hometrack says:

“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.”