More than a third (36%) of homes in Southern England are in property markets experiencing house price falls, according to Zoopla, as London property market trends spread into commuter areas and further afield in Southern England.

But the property portal found that, where there are annual price falls, these are small, limited to higher value areas, and expected to be short-lived when compared to London.

Wide variations

While the average house price for the South as a whole stands at £323,910, up a marginal 0.6% over the last year, there’s a wide variation in growth at a localised level.

Over a third (36%) of local markets in the whole of Southern England registered a fall, with 47% of areas in the South East seeing house price falls, and 42% in the East of England.

In the vast majority of cases the level of price falls is less than -2.5% and it is high value markets that are more likely to be registering price falls than lower value, more affordable areas.

The ripple effect

Southern England is following London when it comes to average house price growth, but the proportion of markets experiencing falls is lower than in London and the decline in house prices is expected to be less protracted.

Richard Donnell, director at Zoopla, said: “London is a large global city whose influence on the demand for housing is not solely limited to the 33 London boroughs. The current slowdown in Southern England which has extended out from London is a result of weaker housing demand after a period of high price rises. Sales volumes are down 10% since 2015 as buyers respond to multiple tax changes, new mortgage regulations and increased affordability pressures.

“However, we do not expect the extent of price falls to be as pronounced or prolonged as in London as prices overshot by a lesser amount in our view.”