Is your area set for a local property crash?
In some areas demand has fallen off a cliff: what does it mean for house prices?
By Sarah Coles
Housing market report
Rebekah Downes/PA WIRE
Property owners are getting a sinking feeling. They've read about the healthy property market, spruced up their home, and put it on the market. And yet no-one is interested. Even in London, where once buyers were breaking down the door for a chance to put in a sealed bid, now they seem to have melted away. The question for many buyers is whether they are about to see this translate into a collapse in local property prices.
Researchers from eMoov.co.uk have been focusing on demand for property in 100 towns across the country: they measure this by looking at the percentage of listed properties which have already had an offer accepted. In times of high demand, more than 70% of properties are under offer. Now, by contrast, some areas have little more than 10% under offer.
The areas which appear to be suffering the most are County Durham, Cheshire West and Chester - where only 12% of houses are under offer. They are followed by Bradford at 14%, and Barnsley, Sunderland and Tameside at 17%.
However, it's not necessarily the case that those at the bottom of the pile are at most risk of a price crash. In some cases, sales have been sluggish for a while: Bradford and Sunderland, for example haven't seen the percentage under offer rise above 20% this year.
These levels of demand are the new norm, and there's less risk of a sudden fall in prices: it's far more likely that house prices will remain steady or fall more gradually.
The crash risk lies instead in areas where low levels of demand are a new and horrible phenomenon. In Cheshire West and Chester, for example, back in June 31% of properties were under offer - so the fall to 12% is a significant concern. Likewise, in Calderdale - currently 23% of properties are under offer - back in June that figure was 53%.
And it's not just the areas down the bottom of the table who have cause for concern. In some areas percentages remain above 30%, however, the falls are significant. These areas of concern are largely in and around London.
eMoov found the worst performing areas are Wandsworth - where demand has fallen from 55% to 28% in six months. This is followed by County Durham where it has fallen from 37% to 12%, Southwark where it is down from 58% to 37%, and Croydon, where it's down from 62% to 41%.
Most of the rest of the top ten worst-performing areas are made up by London boroughs, including Islington, Lambeth, Hackney, Tower Hamlets and Haringey. The picture across London looks generally gloomy. In February 55% of all properties listed in London had an accepted offer on them, this dropped to 50% in June and in September this has slumped down to just 41%.
Property Expert Russell Quirk, CEO of eMoov.co.uk commented "Once again the eMoov Property Hotspot highlights the growing trend of a London ice age. 8 of the top 10 biggest fallers in our index are areas within the South East which just highlights the shift in consumer confidence in the London market.
The real concern is that in many of these areas prices have been soaring in recent years. Across London prices have risen more than 30% since the General Election, while the average for the rest of the UK has been less than 1%.
It makes it more likely that a collapse in demand in these London boroughs could translate into a dramatic reduction in prices - so that those who bought at the peak will be left horribly exposed to the risk of negative equity.
As ever with property prices, across the country the picture is far more mixed. There are areas where continued demand continues to support prices. Those which still have a significant proportion under offer include Bexley, where 69% are under offer, Sutton where 64% are, Hillingdon where 61% are, Medway at 59% and South Gloucestershire at 58%.
There are also plenty areas where demand has grown over the past six months. Those which have risen five percentage points or more (listed in order of the largest gains in demand) are:
Rhondda Cynon Taf
Worst-performing areas (and their movement since February)
County Durham -25%
Areas with the least demand (and the percentage of properties under offer)
County Durham 12%
Cheshire West and Chester 12%
Areas with the most demand (and the percentage of properties under offer)
South Gloucestershire 58%