The UK property market is becoming increasingly divided, with some homeowners seeing gains of almost £10,000 while others watch prices plummet.
New figures from Zoopla reveal the typical home has increased in value by £3,400 over the past year, taking the nationwide average to £272,800.
However, annual price growth has slowed to 1.3%, down from 1.7% at the same point last year, which the agent puts down to increased housing stock ‘giving buyers more room to negotiate.’
The number of sales agreed has dropped 9% compared with a year ago too, as buyers adopt a ‘wait-and-see approach’ amid higher mortgage costs and economic uncertainty.
But a number of regions across the country are bucking this trend.
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Northern Ireland was the strongest performer in terms of annual cash increase, with the average home — now worth £197,200 — rising by £9,610 over the past 12 months.
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The North West recorded the second highest jump, with average values climbing £7,100, followed by Scotland (+£5,220), the West Midlands (+£5,000) and the North East (+£4,600).
Further south though, the market has taken something of a nosedive.
London saw the biggest annual fall, with the average house price dropping £3,270 over the past year to £527,100.
The situation is much the same in the South East, where values have dipped £1,480 year on year, while prices in the South West are also down, albeit by a far less dramatic £110.
Looking at percentage growth rather than cash values reveals a similar pattern.
Once again, Northern Ireland continues to lead the table, with annual price growth of 5.1%, although this has eased from the 7.5% recorded in June last year.
Annual growth rates have actually gone up in some regions, particular in the North West, North East and Scotland, making them among the few parts of the country where momentum has clearly strengthened.
By contrast however, London’s growth has gone from 0.7% to -0.6% within the same 12-month period, and the South East has also moved into negative territory.
Local property hotspots
Warrington, Hull and Dundee were highlighted by Zoopla as the UK’s standout local markets, with sales agreed continuing to rise alongside faster house price growth.
According to the agent, the upward trend seen in these areas is down to ‘tighter supply and smaller mortgage cost increases relative to home values.’
Meanwhile, Bath, Oxford and Harrow are moving in the opposite direction; not only have sales agreed fallen consistently here, price growth has slipped from positive 12 months ago to flat or negative now.
‘This data shows how market conditions can differ sharply between neighbouring towns, and even by property type on the same street,’ adds Zoopla. ‘Buyers, sellers, agents and builders need to consider local dynamics, not just national or regional figures, to make better decisions.’
What’s causing the South’s house price slump?
Commenting on its findings, Zoopla says it’s likely the case that higher borrowing costs are weighing on buyer confidence.
Average mortgage rates eased from almost 5% in April to around 4.65% in June before edging back up to roughly 4.75% in July as tensions in the Middle East pushed up wholesale funding costs.
Since January, those increases have added around £125 a month – or £1,500 a year – to the cost of a typical mortgage.
And with households buying in more expensive areas feeling the biggest financial impact, many are choosing to delay their moves until costs become more predictable.
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