Property prices will be hit by public spending cuts
Property prices in areas with high rates of public sector employment will take a disproportionately hard knock over the coming months, according to Zoopla.
Due to heavy public sector job losses predicted in this week’s comprehensive spending review, Zoopla claimed property prices in Oxford will be hit the hardest.
The property website said that 46 per cent of all workers in Oxford were employed in the public sector. Average house prices in Oxford have already fallen by almost four per cent over the past three years to a current level of £326,396.
Other areas where public sector cutbacks will see falling house prices include Cambridge, Middlesborough, Hastings, Canterbury, Stafford and West Dorset. Public sector employment accounted for over 40 per cent of the workforce in these areas.
The City of London was least likely to see much impact on house prices due to public sector cuts as only four per cent of workers were employed in the public sector. Zoopla claimed average house prices in London were £468,962, up by over three per cent over the past three years.
Other local authority areas where property prices may only be marginally impacted by the cuts include Crawley, Corby, North Warwickshire, Broxbourne, North West Leicestershire and Bracknell Forest – all places where public sector employment accounted for under 15 per cent of the workforce.
Nicholas Leeming, commercial director at Zoopla, said: "The country is braced for extensive cuts to government spending and a significant number of public sector job losses are anticipated over the coming years.
"In areas where more people are employed by the state, rising unemployment will lead to more homeowners struggling to pay their mortgages as well as dampening demand from buyers, which will put downward pressure on house prices in these areas.
"House prices are likely to be far more resilient in areas with a smaller share of public sector employees."