According to the latest figures released by Zoopla, the time to sell a home across UK Cities has hit a three year-high with residential properties taking nearly a month longer to sell than they did in 2016.
Zoopla found that vendors are now accepting offers that are an average of 3.8% or £9,800 lower than the initial asking price.
Demand from owner-occupiers looking to purchase a new home is holding up, with average house prices across UK cities 2.4% higher than in September 2018. While Brexit uncertainty is impacting market sentiment, market fundamentals – and particularly the affordability of housing – continue to shape market dynamics at a city level.
Market conditions strongest in Midlands and North of England
Rising employment levels and attractive affordability are sustaining demand in cities across the Midlands and North of England, resulting in above average house price growth. The majority (75%) of UK Cities in these regions are registering an average time to sell of between 8.4 and 9.5 weeks, with sellers accepting the smallest discounts to asking price of 2 to 3%).
Market dynamics have improved markedly over the last three years in Liverpool and Newcastle, but discounts to asking prices remain above average at over 4% with an average time to sell over 10 weeks.
Housing market conditions remain weakest across London, Oxford and Aberdeen. Here, the average time to sell is over 14 weeks and the discount required to achieve a sale is just below 5% – this is double the level of discount to asking price in cities with the strongest market conditions.
The weakest market conditions are in Aberdeen, resulting from the fall in the oil price since 2015; average home values are £46,969 lower here than they were in mid-2015.
In London, residential properties now take 14.5 weeks to sell, which is over a month (5.3 weeks) longer than in 2016. Sellers in the London market are accepting offers from buyers that are on average 5.7% below their asking price, up from just 1.8% in 2016.
Discount to asking prices also diverge between inner and outer London. Inner London remains more price sensitive, with agreed prices averaging 7.6% or £49,824 below asking, compared to a 4.7% gap in outer London, which equates to an average reduction of £21,015. In addition, homes within inner London now take 20 weeks to sell compared to 13.9 weeks in outer London – both higher than the UK Cities average of 12.2 weeks.
Time to sell across southern cities has accelerated up from three years prior, with homes taking an average of 11.6 weeks to sell, in comparison to just 7.4 weeks in 2016. Discount to asking price has also increased over the last three years from 1.7% to 3.8% in these cities.
Scottish markets prevail
The strongest market conditions are in Scotland, where a different system for sales transactions, and where more information is provided to buyers up front, makes for the fastest time to sell of all UK Cities. Specifically, homes in Glasgow and Edinburgh sell within 5-6 weeks. With property typically marketed as ‘offers over’, Glasgow and Edinburgh are also the only UK Cities not to register a discount, instead commanding an average of 6-7% above the asking price.
Richard Donnell, Research and Insight Director at Zoopla said, “There is a continued polarisation in housing market conditions across the country set by underlying market fundamentals, albeit Brexit uncertainty has been a compounding factor for lower market activity in some areas.
“A General Election seems to be a growing possibility ahead of any Brexit resolution; however, once the political outlook becomes clearer, we would expect a modest bounce-back in demand for a six – 12-month period. Regardless, removing the uncertainty caused by Brexit will do little to address levels of housing affordability, which are limiting market activity across southern England.
“Market conditions are set to remain weak in southern cities until pricing levels adjust to what buyers are willing, or can afford, to pay. London is three years into a re-pricing process, and we expect sales volumes to slowly improve over 2020, while house price growth remains subdued.
“There are large parts of the country where housing affordability remains attractive, fuelled by continued economic growth that supports demand for homes, resulting in reasonable sales periods and only modest gaps between sales and asking prices.”