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UK homeowners forced to settle for below asking price

People selling their homes have typically had to settle for below the asking price in recent weeks, according to Zoopla, which is predicting house prices will fall by about 5% next year.

The average price achieved in recent weeks has been 3% below a seller’s asking price when the property website said for much of 2021 and the first half of this year, it matched the asking price. Zoopla said it expects discounts to increase further in 2023.

Since the start of September, one in nine homes have had their original asking price reduced by 5% or more, Zoopla said, and a quarter has had the price cut to some degree, according to the October index.

Asking price reductions are greatest in southern England, where sales volumes have fallen the most, with almost one in three homes in the south-east and east of England reducing asking prices to attract demand, the report said.

Annual house price growth slowed to 7.8% last month, down from 8.1% in September and the lowest since November 2021, according to Zoopla data. Demand has fallen 44% since September’s disastrous mini-budget, which drove mortgage rates sharply higher and led to hundreds of deals being pulled from the market.

New sales have dropped by up to 50% in previous hotspots and areas where higher mortgage rates will hit buying power hardest – in southern England, east Midlands and Wales. Sales have fallen less in more affordable areas and in London, where market conditions have been weaker. Zoopla expects mortgage rates to fall to about 5% at the turn of the year from about 6% for two-year and five-year fixed deals.

More homes are coming to the market for sale, with the total stock of homes available up 40% from this time last year – but that’s still almost 20% below pre-pandemic levels.

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