One in four sellers accept MORE THAN 10% below asking price as number of homes for sale reaches six-year high

Homebuyers are enjoying ‘the best market conditions in years’, with a glut of homes for sale now forcing sellers to accept offers well below asking price, according to Zoopla.

One in four sales is agreed at a price of 10 percent or more below the asking price, according to the latest analysis by the real estate portal.

It says buyers are in a strong bargaining position thanks to more homes coming onto the market and fewer rivals.

According to Zoopla, the number of people house hunting fell over the summer as mortgage rates rose.

While there has been a modest recovery in the fall, buyer demand remains 13 percent lower than at the same point in 2019.

This is good news for buyers who are actively looking for a home, as it means there is less competition for each home.

At the same time, the number of homes for sale has reached a six-year high: there are now 34 percent more homes for sale than a year ago.

Zoopla says the average estate agent industry now has 31 properties for sale, up from a low of just 14 in the middle of the pandemic.

This recovery in supply is particularly noticeable in the three- and four-bedroom family home market – a trend seen across the UK.

Only Scotland, the North East and North West of England have fewer homes for sale than before the pandemic.

Increased supply increases choice for buyers, but is likely to keep prices under downward pressure as price-sensitive buyers continue to bargain.

Richard Donnell, executive director of Zoopla, said: ‘These have been the best conditions for homebuyers for several years now, as there are more homes to choose from and sellers are more willing to negotiate price to make a sale.

‘There is a growing acceptance that what a house might be 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 at the start of the pandemic.’

The average discount on the asking price reaches its highest point in five years

According to Zoopla, average discount buyers are negotiating with the asking price now at its highest level in five years.

It says home sellers typically accept 5.5 per cent below their asking price, which equates to an average discount of £18,000 per property.

This is significantly higher than the average discount of 3.4 percent in the first half of 2023.

Sellers are finding they have to make do with lower offers, especially in the South East of England and London, where the average discount on the asking price is 6.1 percent – ​​equating to a total discount of £25,000 on the average asking price.

In the rest of Britain, the discount is smaller at 4.8 percent, or an average of £11,000, but this is still the highest level in recent years, according to Zoopla.

House prices have only fallen slightly compared to last year

According to the research, house prices in Britain have fallen by 1.2 percent over the past 12 months, with prices falling in all regions of Britain except Scotland and Northern Ireland.

This time last year, Zoopla reported that average prices had risen 8.2 percent year-on-year.

Average prices are down 2.6 percent on the year in the South East, and 2 percent in London. In Scotland, however, prices are 1 percent higher.

Zoopla says the bigger price falls are concentrated in southern England, particularly in markets that recorded strong demand and strong house price growth during the pandemic ‘race for space’.

Although higher mortgage rates have affected purchasing power, there is no evidence of an acceleration of price falls in the most expensive markets such as London.

In fact, annual price falls in London are lower than in the wider south-east and neighboring commuting areas.

Zoopla says this is partly due to better value for money and a steady return to office work, which is supporting sales volumes and price levels.

London house prices remain high in cash terms but have failed to keep pace with the rest of Britain over the past six years.

The average house value in London is just 8 percent higher than seven years ago, compared to a 28 percent increase in the rest of the country.

Guy Gittins, CEO of Foxtons, said: ‘London is consistently the UK’s highest value property market, so is less sensitive to the market fluctuations seen elsewhere.

‘This means London homeowners are well positioned to benefit from the coming surge we see annually from Boxing Day into the New Year.

Will house prices continue to fall next year?

According to Zoopla, current house price declines will continue into 2024.

It says that while five-year fixed mortgage rates have fallen below 5 percent, they need to fall further to get more buyers back into the market.

Richard Donnell, executive director of Zoopla, said: ‘Rising earnings and incomes are slowly improving purchasing power, but house prices have not fallen enough to offset the impact of higher interest rates.

‘We expect that the number of homes for sale will decrease, because some sellers are taking their homes off the market with a view to a restart in the new year.

“Homeowners serious about selling in the first half of 2024 should set their asking price realistically to attract demand and make a sale, especially in light of increased supply.

‘Financial markets expect the Bank of England to start cutting interest rates around the summer of 2024.

‘If mortgage rates start to fall further, this will support an improvement in demand and sales volumes later in 2024, but prices will remain under modest downward pressure.’