Research from the property website Zoopla found that 42% of homeowners are accepting a discount of 5% or more on the asking price of their home in order to secure a sale, which is said to be the highest level since 2018. The increase in mortgage rates and the cost of living crisis are continuing to impact the housing market, according to Zoopla, with 1 in 6 accepting over 10% off the initial asking price of their property. Despite this, the average offer accepted by sellers is 3.8% below the asking price.
Commenting on the latest report Richard Donnell, Executive Director at Zoopla says: “The resilience of the housing market and homebuyers is set to be tested once again as mortgage rates increase over 5%. Mortgage rates falling to 4% earlier this year supported a rebound in sales and led to house prices registering small month-on-month gains.
"Demand for homes remains but those households looking to move home in 2023 need to be very realistic on pricing and get the view of agents on where to pitch their asking price to secure a sale.”
Why are sellers accepting discounts on asking prices?
According to Zoopla, the increase in mortgage rates and pressures from the cost of living crisis means buyers are negotiating 'harder bargains' and with sellers looking to get a sale, they are accepting discounts at a higher rate than previous years. The increase in mortgage rates is also affecting those wishing to purchase with a mortgage with some buyers even being priced out of the market, with Zoopla's research showing 14% less buyers in the market over the last 4 weeks compared to this time last year. Despite this, current sales agreed are sitting at 8% higher than the 5-year average.
The following graph from Hometrack shows the number of properties being sold with an asking price discount of 5% or more.
What is going to happen to UK house prices?
Zoopla's House Price Index predicts that property prices will 'be up to 5% lower by the end of 2023' despite a recent increase in sales over the spring months. At present, house price growth has slowed to +1.2% on average, but this does vary depending on the region with some areas impacted more than others. Our article, 'What is going to happen to UK house prices?' explains the housing market predictions in more detail.
How to get the best price for your property
If you are looking to sell your home then there is an online tool that enables you to compare local estate agents and find the one that will sell your house the quickest but also the agent with the best record of selling properties for their asking price. The tool will also allow you to compare estate agents' fees. Have a read of our article "Find the best & cheapest local estate agent in seconds" for more details.
How to get the best mortgage deal
With the average 2-year fixed-rate mortgage increasing to over 6% in the last few weeks you may be wondering how to secure the best deal on your mortgage. Our article, 'Best mortgage rates in the UK' summarises the best rates for fixed-rate and tracker mortgages while our mortgage comparison tool allows you to compare the best deals on the market.
If you are looking to move home it is advisable to speak to a mortgage broker* who will be able to offer personalised advice based on your individual circumstances and the current market.
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