UK Home Sellers Increase Discounts to Secure Deals
In the face of high interest rates and a sluggish housing market, UK home sellers are resorting to cutting asking prices in order to entice buyers and close deals. According to a new report from property website Zoopla, buyers are successfully negotiating discounts even as the traditionally busy autumn selling season kicks off.
The report reveals that the average discount to the asking price reached 4.2% in September, the highest level since 2019. This amounts to a reduction of £12,125 on average. In London and the South East, selling prices are 4.8% below asking prices, compared to 2.8% for the rest of the UK.
Richard Donnell, research director at Zoopla, highlights that one in 10 house prices dropped by more than 10% before attracting a buyer. This serves as a clear indication of how the housing market is adapting to the impact of higher borrowing costs. Since December 2021, interest rates in the UK have increased 14 times, leaving potential buyers with significantly reduced purchasing power.
Zoopla emphasizes that the sharp rise in mortgage rates since last year, along with the increasing cost of living, has presented a major adjustment for both home buyers and the broader market. The report also reveals a modest increase in demand for homes, marking the first rise since the spring. Enquiries to estate agents have gone up by 12% since the August bank-holiday weekend. However, it’s important to note that current demand still lags behind last year’s figures by a third.
Nathan Emerson, CEO of Propertymark, suggests that buyers and sellers are now finding a more “affordable middle ground” amidst these challenging market conditions. As sellers recognize the need to lower prices to attract buyers and close deals, a sense of balance is being reached.
While the housing market continues to grapple with the impact of high interest rates, these discounts may provide an opportunity for prospective buyers to enter the market. As the autumn selling season gains momentum, both sellers and buyers will need to navigate this evolving landscape to achieve their goals.
More detail via The Guardian here… ( Image via The Guardian )