Property prices have fallen by 1.2 per cent over the last year, according to one property portal.
Sellers are becoming more realistic, accepting offers at 5.5 per cent below asking price, according to Zoopla. This is an average £18,000 discount – the highest in five years.
In London, the typical agreed price is now £25,000 lower (6.1 per cent) than the asking price, as sellers become more realistic.
Greater supply of homes – which is at a six-year high – and reduced demand due to soaring mortgage costs have put downward pressure on prices. Demand is down 13 per cent compared to 2019, said Zoopla.
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.”
Sales volumes up
The property portal added that this ‘greater realism on pricing’ is supporting new sales volumes, which are 15 per cent higher than a year ago and five per cent up on 2019 levels.
Donnell added: “It’s a positive sign that new sales continue to be agreed at a faster rate than a year ago and pre-pandemic. House prices do not need to post bigger falls to get people moving but sellers need to be ready for more negotiation on price.”
House prices down
UK house price inflation fell to -1.2 per cent, down from 8.2 per cent a year ago.
Zoopla noted that house prices continue to fall across much of the UK ‘with single digit annual price falls being recorded across all price bands’.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Black Friday has hit the property market, which means a bleak time for sellers. They’re having to slash 5.5 per cent off asking prices to secure a sale, providing the biggest discounts for five years. This doesn’t bode well for the future of property prices.
“The worst is far from over. In a market like this, an awful lot of sellers will decide now is not the time to be trying to sell, and take their house off the market for now. The Office for Budget Responsibility (OBR) thinks transactions will keep dropping from here, and will be down an average of 6.9 per cent in 2024.
“This will take a toll on house prices. The OBR expects them to fall 4.7 per cent in 2024 – taking the peak-to-trough drop to 7.6 per cent.”