Zoopla: Home sellers forced to cut asking prices by £14,000 in order to shift properties

Home sellers will accept an average discount of 4.5 percent off the asking price to sell their properties, according to the latest figures from real estate website Zoopla.

The average property price in the UK is now £260,800, Zoopla said, representing a reduction of £14,100. According to the real estate site, it is the largest difference between the asking price and the selling price in five years.

House price growth in the UK slowed to 5.3 percent over the past 12 months, Zoopla reported, from 8.6 percent last year.

Most buyers had to pay the asking price for most of 2021 and 2022, but now a buyer’s market is emerging.

In addition, house prices rose by an average of £42,000 during the pandemic, meaning the average seller now has to forgo about a third of the increase in value they saw during that period.

However, Zoopla says the market is still on track for a “soft landing” with prices likely to fall by up to 5 percent over the remainder of 2023.

Activity is down, with buyer demand and sales down 20-50 percent from a year ago, but the property portal said these numbers are still ahead of the three years leading up to the pandemic.

Richard Donnell, Zoopla’s Executive Director – Research, said: “Housing market activity has recovered in line with pre-pandemic levels. Sellers must give up discounts to make sales, the value of which is equivalent to a third of the price gains made during the pandemic.”

‘You can have two opposing views on performance in the sales market. The glass-half-empty view is to look at trends on a year-over-year basis and compare this year to the scorching hot market conditions a year ago.

“The glass-half-full picture compares the current market to the pre-pandemic years (2017-2019) when activity levels and house price increases were more favorable and trading conditions more difficult.”

Madness over: Home price growth is slowing from peaks during the pandemic as a surge in mortgage rates has eroded purchasing power

On the supply side, the number of owner-occupied homes has increased by 60 percent compared to the same period last year.

The average real estate agency has 24 homes for sale compared to just 15 a year ago, Zoopla said.

And 40 percent of homes currently for sale on Zoopla have had their asking prices lowered to attract price-sensitive buyers.

It said there was a “nationwide repricing” as the market adjusted to reduced buyer power following the rapid rise in mortgage rates late last year.

And although interest rates have fallen steadily since the beginning of the year, the average home buyer has 20 percent less purchasing power than a year ago, when mortgage rates were 2 percent.

Zoopla said it expects small month-over-month house price cuts over the next two to four months. By the summer, it expects the house price index to show modest annual price cuts of up to 2 or 3 percent.

On a regional basis, the annual growth rate for the past year ranges from 2.5 percent in London to 7.1 percent in Wales.

“All this points to a reasonable level of sales in 2023,” said Donnell. Working from home, increased retirement and high immigration all continue to drive demand to move back home.

Wales Wins: Different regions experienced different house price growth rates over the past year, with Wales seeing the largest increase