Home prices across 20 major U.K. cities rose by a feeble 1.7% in March compared to a year ago, the weakest growth in nearly seven years, according to a monthly index from real estate data firms Hometrack and Zoopla.
Buyers have pulled back considerably in recent months in response to political and economic uncertainty, causing house prices to stagnate across an index of the country’s major cities. The latest reading is the lowest since May 2012, according to Zoopla’s report.
London and cities in the South of England are largely driving the slowdown. Homeowners in Southampton were watching their home values grow by an annual rate of more than 3% a year ago, once-stable growth that has now dropped down to less than 1%.
The cooling is even more pronounced in Portsmouth, where the average home traded for £239,000 (US$308,000) in March. Annual price growth dropped from 5% a year ago to little more than 1% in March, according to the report.
Stagnant prices are largely a reflection of slowing sales, as home prices outstrip the budgets of interested buyers.
“Falling sales volumes after a prolonged period of high house price growth is part and parcel of the unfolding housing cycle,” said the report. “The reality is that the more house prices increase over time, the more buyers are priced out of the market through a mix of affordability factors.” Read more