UK home sellers are having to cut an average of £14,000 off the original asking price as the market continues to cool, the data shows.
Property website Zoopla also said that, in the face of weaker demand, more than 40% of the homes it currently put up for sale had an asking price that was lowered to attract “price sensitive” buyers.
However, a separate Halifax survey on Tuesday highlighted the sizable gains in home prices made by millions of homeowners over the last three years, and how larger homeowners were the big winners in the “space race”. fueled by the pandemic, while London owners have earned less.
According to the latest data from Nationwide, UK house prices have fallen for four consecutive months, while rival Halifax said they were flat in January but have fallen in each of the previous four months.
Zoopla said demand from homebuyers had “rebounded” in the first two months of this year after September’s disastrous mini-budget wreaked havoc on financial markets, but remained at half the level seen a year ago as buyers remained cautious.
The supply of homes for sale is also improving: the website reports that the average realtor’s office has 24 homes for sale compared to 15 a year ago, offering more options for buyers, who now have more room to negotiate the price. and helping to reduce upward pressure on property values.
As a result, sellers had to accept an average discount of 4.5% off the asking price to get a sale – the highest in five years, Zoopla said. In London and the South East, the figure is 5.5%.
The average discount to the asking price was £14,100 – but with the website estimating that a typical price The UK home has had £42,000 added to its value during the coronavirus pandemic, which suggests sellers are giving up, on average, just a third of that gain.
Richard Donnell, the site’s chief executive, said: “Ask-price discounts have increased, and while discounts of 4-5% are manageable, if they increase further it would point to a greater likelihood of further declines in house prices.” . However, he added that he believes the market “remains on track for a soft landing in 2023, with modest price declines of up to 5%”.
Data from Halifax showed that the average UK house price increased by 20.4% – or £48,620 – between January 2020 and December 2022, rising from £237,895 to £286,515.
During the previous three years – January 2017 to December 2019 – it grew by 7.8%, or £17,158.
According to 2020-22 data, the median price of larger homes grew at nearly twice the rate of smaller properties. When the UK property market first reopened after months of Covid lockdown, there was a surge in demand for larger homes as buyers sought more space, a garden or better environments to work from home.
As a result, the average price of a detached house rose by 25.9% between the beginning of 2020 and the end of 2022.
On the other hand, demand for smaller properties in more urban areas has dropped during the pandemic. In the UK, the typical cost of an apartment increased by 13.3% over the same period. However, the impact of the race for space was particularly acute in London, where the average price of a flat rose by just 3.8%, or just under £10,000, over three years.