Greater London is the UK’s worst performing region with prices down by 0.4% over the last 12 months while average prices in England and Wales have seen their biggest monthly fall for two years.
Overall asking prices fell by 0.4% in England and Wales and are just 3.4% above a year ago, according to the latest index data from home.co.uk, taking the average price to £296,609.
In Wales prices fell by 0.7% and are only 0.6% up year on year at £184,975 while in Scotland although they fell by 0.3% month on month they are 5.4% above a year ago at £179,511.
The worst drop was in the South East of England, down 0.8% month on month but at £391,391 price are still up 3.2% year on year, However, even in the East of England which has led price growth, values were down 0.3% although at £344,077 average prices are some 10.6% higher than a year ago.
Doug Shephard, home.co.uk director, pointed out that in December 2015 the annualised rate of increase in home prices was 8% but now it is just 3.6% and the trend is clearly to the downside while in London year on year growth is negative for the first time in six years.
‘The same slowdown that hit London is rippling out to the South East and East of England. Supply of homes for sale has risen very rapidly in both regions and we expect that this will soon impact negatively on marketing times and later on prices,’said Shephard.
He pointed out that the typical time on the market is already creeping up in the South East and price growth has dropped to just 3.2% compared to 10.6% in December 2015 and it is clear that the slowdown that began in prime central London three years ago has engulfed all of Greater London and is now spreading to the South East and the East of England.
He believes that the downturn in London and the South East will weigh very heavily on the national average growth figures and he expects this recent trend to continue with price growth in England and Wales falling to zero or below before the end of 2017.
A regional breakdown shows that there are several locations that are performing well and show no signs of an imminent downturn such as the West Midlands and Scotland with price growth gains above 5% year on year and only moderate increases in supply.
