A property market ‘ripple effect’ is taking place in the south of England, where house prices are following trends in London and registering price falls.
That’s according to data released today by Hometrack which has revealed, following strong growth between 2010 and 2015, a third of homes in southern England were in areas where prices were falling.
It explained these price decreases were concentrated to higher value markets and there was little evidence these price falls had begun creeping north to the Midlands.
Hometrack, a property market analyst, said while prices falls were happening across a broad area, the actual rate of these decreases were low. It described them as being akin to the ‘froth coming off the market after a period of high house price growth’.
Marc von Grundheer, director of London letting and estate agent Benham and Reeves, said London would always be the driving force of the UK property market.
But just as it led the way when price growth was buoyant, the same could be said when price growth in the capital dropped a gear.
He added: “We are currently seeing this in the South East and other surrounding markets as those within arms’ reach of the capital often find the market sentiment impacted by the same influences due to the market ripple effect.”
Hometrack’s report forecast this repricing process would be more short-lived than in London as the number of sales, which has been falling back recently, increase.
And von Grundheer agreed with this. He said: “As a nation, we aren’t really accustomed to a prolonged period of price-based or transactional decline and so while current market conditions may seem ominous, they are actually far from it.
“While the cream of price growth may have to come off the top due to current market conditions there remains a very nice pint of milk below it.”
