According to data from property platform Zoopla, UK house sellers are reducing prices in order to secure deals during the autumn selling season. Over the past four weeks, discounts on asking prices have increased to an average of £12,125, the highest level since March 2019. This trend comes after the Bank of England paused its series of interest rate increases, which brings stability to borrowing costs. However, analysts believe that further price reductions may be necessary before market activity fully recovers.
Mortgage lenders have cut their rates during the summer, making it more affordable for buyers. Despite this, Capital Economics projects that borrowing costs will remain relatively high and house prices will continue to fall until mid-2024. It is estimated that house prices will drop about 10% in total from their peak in August 2022. In fact, house prices experienced a 4.6% decrease in the year to August, the largest drop since 2009. The current market conditions indicate that it remains a buyer’s market, with buyers negotiating larger discounts from the asking price.
Zoopla’s research director, Richard Donnell, suggests that the asking price isn’tthe actual value of the home, but rather a starting point. Buyers in today’s market are seeking bigger discounts and are more likely to negotiate. Approximately a third of homes that successfully sold had their prices cut, with one in 10 properties experiencing a price reduction of more than 10% before finding a buyer. The largest discounts were observed in London and the south-east of England. Despite the anticipated increase in demand and sales during the busy September and October season, Zoopla expects that the number of house sales will be 20% lower than last year, with a total of 1 million sales projected for the year.