Nearly half of sellers accepting significant discount to secure sale – report

New figures from Zoopla have revealed 42% of sellers are accepting a discount of 5% or more off the asking price to secure a sale – the highest level since 2018. What’s more, 15% are accepting discounts of over 10% off the initial asking price.

However, Zoopla also estimate that mortgage rates rising above 5% represents a 10-20% hit to the buying power of those who are purchasing with a mortgage, which is the case seven times out of 10.

While the property portal says this won’t instantly impact prices, they do suggest the trend of buyers being squeezed out of the market is “already evident” with 14% fewer buyers over the last four weeks than this time last year.

Despite this, the data suggests those already in the market remain committed to finding a deal with sales agreed sitting 8% above the five-year average. Indeed, Zoopla suggests it is thanks to this that the pace of house price falls has been slower.

The sharp slowdown in annual growth is a pattern repeated across most regions and countries of the UK. House price growth is highest in Wales at +2.5% and lowest in Northern Ireland at -0.8%.

Some markets are still registering annual price increases of over 4% including Powys in Wales (4.1%), followed by Calderdale in Yorkshire (4%) and Dumfries & Galloway in Scotland (4%).  The weakest growth rates are being recorded in the higher-value housing markets.

A similar outlook comes from TwentyEA’s data which suggests that asking prices at original instruction have risen nearly 3.5% in the last year and over 24% since 2019. They also suggest that exchanged prices have grown at 4.7% over the course of the last year and over 22% since 2019. Nationwide, however, have annual house price growth at -3.5% in their latest index.

Commenting on Zoopla’s data and the outlook for the housing market, 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.

Modest price falls will resume in the second half of 2023 as the supply of homes increases giving buyers more choice and room for negotiation on price. We still expect house prices to be 5% lower over 2023 and there is a very substantial equity buffer to absorb price falls which are likely to be concentrated across southern England.”

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