Meanwhile, demand from homeowners looking to purchase a new home is holding up, with average house prices across UK cities 2.4% higher than in September 2018.
Market conditions strongest in Midlands and North England
Increasing employment levels and attractive affordability are encouraging 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 seeing an average time to sell of between 8.4 and 9.5 weeks, with sellers accepting the smallest asking price discounts of 2-3%.
In Liverpool and Newcastle, market dynamics have improved markedly over the last three years, but discounts to asking prices remain above average at over 4%, with an average time to sell over 10 weeks.
London, Oxford and Aberdeen are weakest performers
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% – double the level of discount to asking price in cities with the strongest market conditions.
Aberdeen witnessed the weakest market conditions overall, resulting from the fall in oil prices 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 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.
If we narrow in on the capital, discounts 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 (£21,015).
Additionally, 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.
Scottish markets prevail
The strongest market conditions are in Scotland (excluding Aberdeen), where a different system for sales transactions, including more information provided to buyers upfront, makes for the fastest time to sell of all UK regions.
Homes in Glasgow and Edinburgh, specifically, sell within 5-6 weeks. With property typically marketed as ‘offers over’, these two cities are also the only UK locations not to register a discount, instead commanding an average of 6-7% above the asking price.
Richard Donnell, research and insight director at Zoopla, comments: “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.”
“Regardless, removing the uncertainty caused by Brexit will do little to address levels of housing affordability, which are limiting market activity across southern England.”
He says 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, especially, is three years into a ‘re-pricing process’, and sales volumes are expected to slowly improve over 2020.
“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,” Donnell concludes.