Over a third of home sellers in England and Wales have slashed their prices in a bid to attract buyers in the run up to Christmas.
According to property website Rightmove, 37% of properties already on the market have reduced their asking price since first listing – the highest proportion at this time of year since 2012.
Average monthly house prices fell by 0.8% – or £2,392 – in October to £311,043.
Miles Shipside, Rightmove director and housing market analyst, said: “In the run-up to the festive season many sellers are trying to tempt distracted buyers to look at their property by dangling the bauble of more attractive pricing given the quieter time of year and more challenging market.
“Many sellers who have been on the market for a while are curbing their initial pricing optimism and are hoping that reducing their property price will result in buyers selecting it as this year’s must-have Christmas gift. The effect is an impromptu autumn sale with the largest proportion of sellers on the market having reduced their initial asking prices at this time of year since 2012.”
The only region in to see an increase in prices was Yorkshire and Humber, with a rise of 0.6% to £174,161.
The North East recorded the biggest fall, with prices dropping by 5% over the month to £144,809.
Shipside said that many of this month’s new sellers were being too optimistic by not discounting more than 0.8%.
“Given that the market has been price-sensitive for a while and a five-year high proportion of sellers are slashing their prices, some sellers and their agents are over-pricing.
“These sellers may well be asking themselves if they could have saved some time and stress by pricing a lot more conservatively than an average of more than 6% ahead of what the market subsequently proved it could sustain.”
The figures provide further evidence that the housing market is slowing.
Last week, the Royal Institution of Chartered Surveyors said UK housing market stalled, with most regions seeing a drop in sales as demand from new buyers continues to decline.
Lucy Pendleton, co-founder director of independent estate agent James Pendleton in London, said: “It’s crucial vendors move with the market when competition from sellers is stiff and there is negative pressure on prices. However, it’s also vital they don’t discount their home in dribs and drabs.
“By dropping the asking price in increments all you succeed in doing is making your property look stale and unwanted, with none of the surge in viewings that a keen discount can bring.”
However, figures from Halifax and Nationwide have painted a more positive picture of the housing market.
According to the latest Halifax House Price Index, annual house prices went up 4.5% in the three months to October – up from 4% in September.
Halifax said that low mortgage rates and shortage of properties on the market, combined with high employment, would continue to support prices.
Nationwide reported that annual house prices rose 2.5% in October, although the squeeze on incomes is weighing on confidence.
