Property buyers in southern England are ‘seeking out value for money’

More than a third of residential properties in southern England are in property markets experiencing house price falls as the slowdown ripples out of London, new figure show.

The latest report from Zoopla reveals that 36% of homes in southern England are in property markets experiencing house price falls, as London property market trends spreads out into the commuter areas and further afield in southern England, which includes the South East, Eastern and South West regions.

But despite the recent dip in values, Zoopla’s resrach department predicts that price falls in southern England will be short-lived when compared to London and by the second half of next year forecasts that the scale of price falls to be much lower.

The average price of a property in south as a whole stands at £323,910, up 0.6% year-on-year

Source: Zoopla Research and Hometrack House Price Indices

The report finds a clear link between house prices and whether markets are registering a softening in prices. In broad terms high value markets are more likely to be registering price falls than lower value, more affordable areas.

In the South East region, the weakest annual growth can be seen in the likes of Woking (-2.3%), Epsom (-2.3%),Basingstoke (-1.9%) and Maidenhead (-1.6%) – all archetypal commuter towns.

Whereas Dover (+3.4%), Hastings (+2.9%) and Shepway (+2.3%) on the coast, lower value areas which are less commutable to London, are performing relatively well.

In the South West, again, it is generally the higher value areas where price increases are lowest. Prime examples are Bathwhere the average price is £345,575 and prices are up +0.3% annually; the Cotswolds £365,630 (+0.7% annually) and Poole £307,667 (+0.3% annually).

The lowest value areas which still have further scope for price growth such as Gloucester andTaunton are experiencing annual house price growth of 3.2% and 4.6% respectively and house prices are well below the regional average.

Richard Donnell, research and insight director at Zoopla, commented: “The London housing market is coming to the end of what can be described as a three to four repricing process where many areas have experienced small, single digit price falls. This is not surprising given the speed of price growth between 2010 and 2016. The year of peak sales activity in terms of actual recorded sales was 2014. 

“Multiple tax changes and growing affordability pressures reduced demand, evidenced by a 25% drop in sales between 2014 and 2018. Prices have been adjusting since 2016 which is more a result of market fundamentals than Brexit which we see as a compounding factor.

“Late last year we reached the peak in terms of proportion of local markets experiencing small annual house price falls. Since then the proportion of markets registering declines has fallen, as the three year re-pricing process approaches the end phase.”

Donnell added: “The trends in London and southern England are all part and parcel of the unfolding housing cycle. There remains plenty of demand for housing in southern England but there are fewer buyers who are more cautious, seeking out value for money.

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