The southern cities and cities the place home costs are falling even MORE than in London

Londoners are not the only homeowners seeing their properties fall in value, according to the latest data from Zoopla.

The property portal says that average prices in every city in southern England were lower than they were a year ago at the end of March.

Along the south coast, prices in the town of Hastings are down £7,160 (2.6 per cent) since last year, while in Worthing property values have fallen £6,750 (2 per cent).

Both towns are seeing prices fall more sharply in percentage terms than in the capital, where the typical home is down 1.8. per cent according to the property website. 

Figures from different sources show a different picture, however, with the latest house price figures from the Office for National Statistics suggesting a 3.3 per cent fall in London in the year to the end of February. 

Homeowners in Bournemouth and Brighton are also seeing prices fall, down 1.2 per cent and 1.1 per cent respectively year-on-year.

Why are prices falling in the south? 

Jack Worrall, branch manager at Fox & Sons estate agency in Bournemouth says there has been an influx of former rental flats hitting the market as landlords sell ahead of 1 May, when Labour’s Renters’ Rights Act comes into force. 

This will make it harder for landlords to evict tenants or increase rents.  

Worrall says: ‘This has increased buyer choice, especially for flats, putting pressure on prices and making sales more competitive. 

‘Higher mortgage rates have also made buyers more cautious and price‑sensitive, with well‑priced homes still attracting interest while others struggle.’

Further inland, house prices in Cambridge have fallen 1.2 per cent, according to Zoopla, and in Reading values have edged down 0.7 per cent. 

Clarissa Currington, branch manager at Abbotts estate agents in Cambridge says the city can be a tricky market for sellers. 

‘There are a lot of estate agents giving unrealistic valuations to win instructions, which means many homes are coming to market overpriced and then sitting there for longer than they should,’ says Currington.

‘The market in Cambridge has changed, and rising living costs and changing buyer habits mean we’re no longer in the phase where properties routinely sell for £50,000 to £100,000 over their true value.’

Northern cities are doing well 

While prices in towns and cities across southern England are falling, the opposite is true further north.

House prices are rising fastest in the North East of England, up 3.2 per cent year-on year, followed by the North West at 3.1 per cent according to Zoopla. 

Every city with house prices increasing above 3 per cent year on year is in the North of England. 

For example, prices in Burnley have risen 5.3 per cent since this time last year, while Blackburn and Rochdale have gone up 5.2 and 5 per cent respectively. 

Homeowners in Liverpool will also likely have seen the value of their property increase, with average house prices in the city increasing by 4.5 per cent over the last year.

Amber Farrington, branch manager at Entwistle Green estate agents in Merseyside says that Liverpool’s property market has remained strong due to a combination of high demand, relative affordability, and ongoing regeneration. 

‘I see that this is continuing to attract both local buyers and investors, as well as drawing in investors from higher value markets in search of better yields,’ says Farrington.

‘The city’s appeal is reinforced by landmark destinations such as the Royal Albert Dock, one of the UK’s most visited attractions with millions of visitors each year, alongside a vibrant waterfront, major universities, strong transport links, and a thriving leisure and cultural scene, all of which continue to drive sustained demand.’

Where next for house prices?

The conflict in the Middle East over the last two months has pushed mortgage rates higher and led to a decline in confidence across the property market.

That said, mortgage rates have been coming down over the past week or two with a raft of major lenders, including Nationwide, Halifax, TSB and Santander, lowering prices, offering some respite to those who need to remortgage or move. 

Having been 4.83 per cent at the start of March, the average two-year fix rose to 5.89 per cent by 13 April. Over the last two weeks, that has fallen to 5.81 per cent.

While buyer enquiries and the number of sales being agreed are below where they were last year, there has been a rebound since Easter, according to Zoopla. 

The glut of homes on the market is also becoming less intense, according to the property website.

It says there are 5 per cent more homes for sale than a year ago, but that 4 per cent fewer homes being listed for sale recently as some sellers take stock of market conditions.

What is less clear is how much further mortgage rates will fall this year and the longer-term impacts on the cost of living for households because of the disruption to global trade.

Zoopla’s analysts still expect sales to hold up through the rest of the year with average price growth nationally of 1 to 1.5 per cent. They expect the North-South divide in both sales speed and price growth to persist.