The London property market continues to struggle as the number of properties on the market increases while prices deflate, according to new research by Home.co.uk.
The East and South East of England are also suffering a post-boom hangover, with high valuations weighing heavily on house prices and lengthening the time properties remain on the market. Currently, these two regions are still experiencing year-on-year gains in price but the trend is towards zero and then slow deflation, possibly towards the end of 2018.
In stark contrast, the Midlands and the northern markets are in fine fettle – gaining a strong headwind of momentum in recent times. Established growth trends are continuing in this region, while marketing times are substantially lower year-on-year.
While the pace of growth in these regions isn’t as frantic as what went before it in London and the Home Counties, there is steady and moderate growth which appears to be more sustainable in the long-term.
That said, the data also shows that house prices in the North East are still yet to recover their pre-recession 2008 levels, while homes in Yorkshire and the North West have only just achieved this. On the other hand, prices in London are 50.5% higher than in 2008 – highlighting that a price correction in and around the capital was probably needed at some point, while also showing that there is potential for more growth in the North.
Home’s latest findings also showed that the supply of property for sale in the UK has risen by 12% year-on-year, with the biggest contributors to this growth in January coming from the East (+22%), South East (+18%) and South West (+20%).
The large increase in supply in the East and South East is expected to cause a further slowdown in these markets and dampen prices even further.
Supply in Wales, by contrast, fell by 4% and in Yorkshire and the Humber it only grew by 5%.
Promisingly, prices increased in all English regions, Scotland and Wales on the previous month, with London and the South West the only exceptions. House prices were up by 0.2% in January, taking the mix-adjusted average for England and Wales up 2.3% year-on-year.
The average time for homes remaining on the market in England and Wales rose to 106 days, but this is three days down on February 2017. The number of homes on the market in England and Wales also went up in January, leading to a 2.7% rise year-on-year.