Home buyers are benefitting from average discounts of £18k on properties, as high mortgage rates impact the balance between supply and demand, the latest report by Zoopla has revealed.
The property website said sellers were accepting big discounts which equated to 5.5% on average across the UK. But in London and the South East buyers were securing discounts of 6.1% or £25,000.
Zoopla explained this ‘greater realism’ on pricing was driving sales. Meanwhile, there were now 34% more homes on the market than a year ago.
Richard Donnell, executive director at Zoopla said: “These are the best conditions for home buyers for some years with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale.
“There is a growing acceptance that what a home might have been worth a year ago is now largely academic given current market conditions. Sellers have plenty of room to negotiate with average house prices still £41,350 higher than the start of the pandemic.”
What is driving asking prices down?
According to Zoopla these big discounts were being driven by high mortgage rates. Over the last year mortgage repayments have become more expensive as interest rates increased and mortgage market conditions pushed rates up further.
This uplift in rates made it harder for buyers to get a mortgage so there were more homes available on the market. This created more choice for those buyers who did have the finance and also enhanced their negotiating power.
Zoopla’s figures showed the number of homes available reached a six-year high with 34% more homes for sale now than a year ago.
House prices, meanwhile, fell across much of the UK, said Zoopla, with single digit annual price falls being recorded across all price bands. Average prices fell by 1.2%, down from 8.2% a year ago.
Buying a home in London
London house prices remained high in absolute terms, but they have failed to keep pace with the rest of the UK over the last six years, Zoopla revealed.
Indeed, the average value of a London home was just 8% higher than seven years ago. This was compared to an increase of 28% across the rest of the UK.
