Reduction demonstrates strong demand for residential property in Midlands and the North
The gap between asking and achieved house prices is narrowing across most of the country, highlighting the strength of regional cities beyond the capital.
According to the latest cities house price index by Hometrack, demand for property in London is falling, as the level of discounting has increased; with asking prices being reduced by 4% in 2017, compared to 0.5% in 2014.
Some properties in inner London have had discounts of as much as 10%.
On the other hand, asking prices in cities like Birmingham and Manchester are more robust, with the markdowns halving from 6% in 2013 to just 2.7% in 2017.
Meanwhile, headline house prices in the two cities have grown by 7.5% and 7.0% respectively, well above the 4.4% national average.
The gap has narrowed in several other regional cities, including Sheffield, Leeds, and Cardiff, and demonstrates the underlying strength of property markets in the Midlands and the North.
However, the report by Hometrack warns that the large discounts experienced in London could be a sign of further price falls.
“The level of discounting provides insight into the strength of underlying demand. Asking prices tend to act as the ‘shock absorber’ to softer pricing as demand weakens,” the report notes.
“However, once discounts get close to 10%, this is when falls in headline prices start to occur.”
Research by Savills points to further strength in the regional markets, as land prices in Manchester grew by 24% in 2017, six times more than the UK average.