Southern house price slump feeding into the midlands: Zoopla

Its data shows that prices grew by just 0.7% in these markets in the 12 months to June, compared to growth of 1.7% across the whole of the UK.

The majority of the seven cities registering less than 1% in house price growth this month are located within southern England - the highest number of cities recording annual price growth of less than 1% in six years.

Underlying market conditions remain stronger in northern cities where supply and demand are more in balance, supporting annual average price growth of 3.6% across this region, however the southern slowdown looks to be feeding into parts of the midlands.

Birmingham has been one of the strongest performing cities since the Brexit vote, but market conditions appear to be shifting with weaker sales growth and rising supply. This indicates that Birmingham may see stunted price growth in the coming months, with the rate of growth already slowing from 7% in June 2017 to 4% today.

The London market is coming to the end of a three-year repricing process. There has been a modest improvement in balance of supply and demand over the last six months thanks to a small, but important, increase in sales agreed and less new supply coming to the market for sale.

Whilst prices are still registering small price falls across many parts of London on an annual basis, the annual price change has improved to 0.0% in June 2019 in comparison to -0.5% in June 2018.

Richard Donnell, research and insight director at Zoopla, commented: “There is a clear imbalance between supply and demand for housing across southern cities and this explains why house price growth in these cities is at its lowest level since 2012.

“Robust demand from buyers continues to support house price growth in northern cities and Edinburgh. Average prices in northern cities are registering annual growth of 3.6%. This is a stark comparison to the 0.7% growth in southern cities. We expect regional cities outside the south of England to continue to out-perform, although there are early signs of weaker growth ahead in parts of the midlands as successive years of house prices rising faster than earnings is beginning to weaken demand.

“London has led the slowdown over the last three years, but here there are signs of greater realism on pricing from sellers and this has resulted in a small but important increase in sales. Affordability and weak market sentiment remain the main constraints on the London market.”