Hometrack finds London house price decline is spreading to regional markets
The latest market insight from Hometrack has looked at how far the trend of London price declines has spread into regional markets.
The data shows that: –
- House prices in London lead the rest of the market – after high growth between 2010 and 2015, a growing proportion of markets started to register price falls.
- The same trend is spreading into Southern England. Over a third of homes are currently in markets with annual price falls, concentrated in higher-value markets. There are limited signs this trend is reaching the Midlands.
- The coverage of falls may seem high, but the absolute level of price falls is low, akin to the froth coming off the market after a period of high house price growth as markets overshoot on the way up.
- We expect the re-pricing process in regional markets to be more short-lived than in London. Sales volumes have fallen back since 2014 but once values re-align, we expect sales volumes to increase.
You can see the full report here and find comment below from London letting and estate agent, Benham and Reeves.
Director of Benham and Reeves, Marc von Grundherr, commented:
“London will always be the driving force of the UK property market but just as it leads the way when price growth is buoyant, the same can be said when price growth in the capital drops a gear. We are currently seeing this in the South East and other surrounding markets as those within arms reach of the capital often find market sentiment impacted by the same influences due to the property market ripple effect.
As a nation, we aren’t really accustomed to a prolonged period of price-based or transactional decline and so while current market conditions may seem ominous, they are actually far from it. While the cream of price growth may have to come off the top due to current market conditions, there remains a very nice pint of milk below it.
We are already starting to see a reversal in previous factors signalling a market decline and any tide of negative movement that has reached the surrounding markets will soon retreat back towards the capital and disperse against the rocks of London bricks and mortar.”