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Property asking and sold price gap narrows to 5% in London

The difference between the asking and sold property price in London is more realistic reducing to 5% from over 20% four years ago.

Research from Zoopla’s Cities House Price Index shows greater realism in London with the asking and sold prices for property reducing from 20% plus four years ago down to 5% in October 2019.

The average discount to asking price in the last four years is 3.4% with regional cities of Manchester on 9%, Nottingham on 7% and Birmingham on 5%.

At the start of 2015 house prices were rising at 15% which was factored into agents pricing and with lower demand in 2016 asking prices have been aligning to what first time buyers and home movers can pay.

This alignment in the capital has taken 3-4 years and the pricing gap of 5% which is lower than other regions cities and more sustainable with the prospect of increasing house sales.

Strong growth from regional cities

Cumulative house price growth has been strongest in large regional cities rising more than 15% since the start of 2017 for Edinburgh Leicester, Manchester and Birmingham.

House price inflation has resulted in the asking to sold price increasing in regional cities and this has moderated demand with the underlying growth in prices now falling to under 5% per year.

The following table from Zoopla shows current house prices and year-on-year growth to October 2019.
City Average house price Annual change
Leicester £180,000 4.7%
Manchester £172,500 4.6%
Liverpool £122,300 4.1%
Edinburgh £236,700 4.0%
Belfast £137,600 4.0%
Birmingham £167,000 3.5%
Nottingham £156,700 3.4%
Leeds £167,800 3.4%
Cardiff £210,100 3.1%
Sheffield £138,400 3.1%
Bristol £282,800 3.0%
Newcastle £129,100 2.7%
Glasgow £123,200 2.6%
Cambridge £414,000 2.2%
Bournemouth £289,800 2.1%
Portsmouth £238,600 1.2%
Southampton £227,900 1.2%
London £476,900 1.0%
Oxford £412,200 0.0%
Aberdeen £154,100 -5.9%
The rate of house price growth as been has been supported by rising demand from first time buyers due to attractive affordability and low mortgage interest rates.

Lower mortgage rates allows remortgage buyers at the end of their introductory offer to avoid the lenders expensive variable rate and switch to a preferential rate to reduce monthly repayment costs.

For London, Oxford and Cambridge house price growth has been flat following falls in 2018 and demand for housing has reduced with a 10% to 25% drop in sales volumes.

London prices supported by tight supply

Pricing in London is firmer with the highest rate of growth in two years, driven by the lowest number of homes listed over the last 4 years and only a modest increase in sales volumes.

For people looking to buy such as first time buyers and home movers can pay or buy-to-let investors increased scarcity has developed this year particularly with the election.

Data from Zoopla reveals a small increase in sales agreed supported by more realistic pricing of new homes on the market, increasing the likelihood of a sale which supports sales volumes.

There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing and use a lifetime mortgage to repay an interest only mortgage or even help your children start or expand a business.

The General Election will accelerate a slowdown in the property market, although the two months until Christmas only represents a tenth of buyer demand.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything or even pay university fees for grandchildren.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.19% Fixed Rate
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2-Years Time
Reverts to 3.59%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
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1.18% Fixed Rate
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1.16% Fixed Rate
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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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