Thirteen cities see fall in house price growth

Despite slower growth, average prices remain 2.9% higher than in January 2018 and Zoopla says underlying market fundamentals remain strong across 12 cities, primarily large regional cities outside southern England.

Leicester recorded the highest annual growth at 6%, followed by Belfast (5.8%) and Manchester (5.4%)

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.

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.

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.”