London: Homebuyers are getting the edge in the UK property market as sellers cut their asking prices to get deals done.
The average discount to asking price to achieve a sale was 4.5 per cent this month, according to a report from property portal Zoopla. That’s the most in more than five years and up from 0.4 per cent in 2022 and 0.6 per cent the year before.
“Greater realism on the part of sellers is supporting housing market activity in the face of higher borrowing costs,” said Richard Donnell, executive director at Zoopla. “While 4 per cent - 5 per cent discounts are manageable, if these were to widen further then this would point to a greater likelihood of larger house price falls.”
Buyers were less likely to get a discount during the pandemic when pent-up demand spurred a boom in house prices. Now, Zoopla says more than four in 10 homes listed for sale on its portal have seen their asking price reduced to attract buyers, with discounts averaging 14,100 pound ($16,916) per sale.
The average UK home gained an average 42,000 pound in value during the pandemic, meaning sellers are sacrificing more than a third of those gains to achieve a deal. That’s largely down to higher mortgage rates, which have shrunk buying power by an average of 20 per cent in the past year, Zoopla said in the report.
Still, homeowners will be largely shielded from the blow of selling their property at a lower price, according to Zoopla’s Donnell.
“Many homeowners are sitting on sizable house price gains made over recent years and have more room to be flexible accepting offers below the asking price,” he said. “We believe the market remains on track for a soft landing in 2023.”