The property market in cities in the south of England is at its weakest in seven years, new figures show as the price gap narrows with the rest of the UK.
Figures from Zoopla’s Hometrack index published on Tuesday show London, Oxford, Cambridge, Portsmouth, Southampton and Bournemouth recorded property price growth of 0.7% in the year to June.
That marked the lowest increase since January 2012, whereas the northern cities of Manchester, Leeds, Liverpool, Newcastle and Sheffield saw average growth of 3.6%.
Price growth has also been strong in several other cities outside the southeast, including fastest-growing city Edinburgh (5.1%), Cardiff, Nottingham, Leicester and Birmingham.
Brexit uncertainty and higher taxes introduced in recent years by former chancellor George Osborne have slowed the dizzying rise in prices that the southeast and particularly London’s market has seen in the past few decades.
But such national issues are not the only cause of the slowdown, which will frustrate homeowners in the region but provide some hope to people struggling to get on the ladder.
There also appear to be too many new homes being built and sold at too high a price.
Sellers are now being forced to lower their asking prices to attract buyers, who are limited by “affordability constraints,” as well as increasingly cautious since the EU referendum.
Zoopla’s listings data shows new supply has grown faster than sales in southern cities since 2016 when prices began to slide.
It says there are 1.3 homes being built for every sale agreed in the south, pushing down prices. Prior to 2016, the ratio was roughly the same, with enough demand to push prices upwards.
Bristol had the highest price growth of any southern city in the 20-city index at 2%, but others had growth below 0.8%.
Hometrack’s June report says “the opposite is true elsewhere,” where house price growth is also faster.
Richard Donnell, Zoopla’s research and insight director, said: “There is a clear imbalance between supply and demand for housing across southern cities and this explains why house price growth in these cities is at its lowest level since 2012.”
Shepherd Ncube, chief executive of estate agent Springbok Properties, said: “It’s promising to see such strength being registered across cities in the north, who have otherwise stood in the shadow of the capital for far too long.
“However, it is important that sellers remain realistic when pricing for the market because as we are seeing in Birmingham, a drastic period of over-performance won't last forever."