House Buyers Are Bagging £14,000 Discounts

Demand is weaker in regions where prices jumped particularly strongly during the coronavirus pandemic and where prices are higher than the national average, Zoopla said

Alliance News 5 April, 2023 | 9:27AM
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House vendors accepting price discounts are selling properties with reductions of 4% or £14,000 on average, according to a property website.

Despite demand for homes to purchase being lower than it was a year ago, improved choice and realism among sellers is helping to drive sales, Zoopla said.

The website tracks the first asking price and agreed selling price for many house sales. It said the £14,000 discount is the median reduction, excluding homes sold with no price reduction.

Demand from house-hunters is 43% lower than a year ago but the volume of sales being agreed is just 16% lower than last year, the website said.

Sellers have seen sizeable price gains over the past three years, giving them more flexibility on agreed prices, it added.

House hunters now have more choice generally, with the average estate agent having 25 homes available, compared with 14 a year ago, Zoopla said.

Rapid rent increases, a strong labour market and falls in some mortgage rates are helping to support demand for house purchases, it added.

However, properties are taking around 15 days on average longer to sell than a year ago. The average time to sell ranges from 28 days in Scotland to 44 days in London, Zoopla said.

It said Scotland, Wales, the North East of England and London are seeing relatively strong levels of buyer demand.

Zoopla said it is seeing a shift in sales towards markets offering better value for money and it expects the inner London flats market to see more activity in 2023.

Demand is weaker in regions where prices jumped particularly strongly during the coronavirus pandemic and where prices are higher than the national average, Zoopla said.

These are markets where higher borrowing costs affect buying power, covering the southern half of England and the Midlands, it added.

The report, which covered March, said: "Comparing sales in the last month to the same time last year, we find an increase in the share of sales in the cheapest 40% of the market by price.

"We also see a drop in the share of sales in the higher-priced top 40% of the market by price.

"This is clear evidence of continued demand from first-time buyers or second-steppers (former first-time buyers who are taking their second step on the property ladder). It also signals more caution on the part of existing homeowners."

Richard Donnell, executive director at Zoopla, said: "the housing market is arguably more balanced than it has been for more than three years.

"Levels of supply have recovered and buyers and sellers are not miles apart on where they see pricing and this means deals are being agreed at an increasing rate.

"Pricing levels are adjusting downwards compared to a year ago but fears of a major downturn in prices are overdone.

"Falling mortgage rates and a strong labour market are supporting activity levels from committed movers who need to be realistic on price if they are serious about moving home in 2023.

"We expect to see levels of activity continue to steadily improve over Easter and into the summer and (the second half of the year)."

Kevin Shaw, national sales managing director at Leaders Romans Group (LRG), said: "Importantly, we're seeing few undecided sellers and buyers: those that are in the market today are serious movers."

Matt Smith, a mortgage expert at property website Rightmove, said the volume of mortgage rate reductions by lenders has gathered pace.

He said: "this reflects lenders' increasing confidence in the future direction of rates following the Bank of England base rate announcement. And, perhaps of equal importance, it's a sign that lenders are actively competing for business from prospective home-buyers."

Smith predicted: "as we go into the Easter break, we can expect that rates will remain flat or even creep down a little in the coming week, in part due to the bank holidays, but also as lenders take stock of the impact of recent repricing activity."

By Vicky Shaw, PA Personal Finance Correspondent


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