More than a third of homes in southern England outside London are in housing markets where prices are tumbling year-on-year, as the cool down in the capital ripples outwards, a report has found.
Some 36% of homes across the South East, East Anglia and the south-west regions of England are in markets where prices are falling annually, Zoopla said.
House price falls in London accelerated from 2016.
But a previous period of rapid house price growth in the capital from 2010 means the average price of a London property is still 20% higher than it was in 2014.
The proportion of areas in London registering annual price falls peaked at 80% in October 2018 – with the number of areas with price falls later reducing as buyers’ and sellers’ price expectations now match up more closely.
Zoopla said that while housing markets in southern England are following trends in London, the general level of price falls in these areas is expected to remain “modest” – and will be more concentrated in commuter belt towns and areas where house prices are particularly high.
For example, in the South East, commuter areas such as Woking (minus 2.3%), Epsom ( minus 2.3%), Basingstoke (minus 1.9%) and Maidenhead (minus 1.6%) have seen annual house price falls, Zoopla said.
By contrast, areas that have performed relatively well for annual house price growth include Dover (3.4%), Hastings (2.9%) and Shepway (2.3%).
In the South West, higher value areas have seen lower house price growth.
Examples include Bath, where the average price is £345,575 and prices are up 0.3% annually, the Cotswolds, where the average house price is £365,630 – a 0.7% annual increase, and Poole where the average house price is £307,667 – up 0.3% annually.
In Gloucester and Taunton, where house prices tend to be more affordable, house prices have grown more strongly, by 3.2% and 4.6% respectively.
Looking ahead, Zoopla expects price falls in southern England to be more short-lived than in London, most likely extending into early 2020.
Its report said: “We are not predicting a subsequent bounce-back in average prices, but we would expect sales volumes, which have fallen by 10% in southern England since 2015, to plateau and then start to increase over time.
“In London, which is further down the road to a pricing realignment between buyers and sellers, we currently expect sales volumes to plateau and slowly start to increase over the latter parts of 2019 and into 2020.”
The report also said there is “little evidence” that the trends in London and southern England are spreading further afield.
In the Midlands, there has been only a very small increase in markets registering annual price falls, again concentrated in higher-value areas, Zoopla said.
Richard Donnell research and insight director at Zoopla, said: “The trends in London and southern England are all part and parcel of the unfolding housing cycle.
“There remains plenty of demand for housing in southern England but there are fewer buyers who are more cautious, seeking out value for money.
“For homeowners entering the market the key to securing a sale is to be realistic on pricing based on the profile of demand for homes in the local market.
“Our analysis shows how trends vary within regions and all local markets have their differences.”