Homes have been selling for 3% below their asking price typically in recent weeks, according to Zoopla. For much of 2021 and the first half of 2022, the average discount that homes were selling for was 0%, it said, meaning that properties were typically achieving their asking price.
The property website said it expects discounts to increase further in 2023. Its latest housing market report said: “History shows that when discounts reach 5-6% this points to flat to falling prices.
“It’s important sellers who want to achieve a sale are realistic on selling prices and speak to agents for the right advice for their home.”
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Zoopla said falling demand and sales mean current sellers are having to set asking prices at more realistic levels to secure buyer interest. Since the start of September, one in nine (11%) homes have had their original asking price reduced by 5% or more, Zoopla said, and a quarter (25%) have had the price cut by any size, according to the index covering the month of October.
Asking price reductions are greatest in southern England, where sales volumes have fallen the most, with almost one in three homes in the South East and east of England reducing asking prices to attract more demand, the report said. Zoopla said the outlook for mortgage rates is the most important factor for home buyers and those planning to move in 2023.
Looking ahead, Zoopla expects sales volumes to drop back to one million over 2023, from 1.3 million in 2022, with house price falls of up to 5%, concentrated in the markets most sensitive to higher borrowing costs.
Richard Donnell, executive director at Zoopla said: “The housing market is adjusting to a reset in the level of mortgage rates but the likelihood of double-digit house price falls at a UK level remains low. While the outlook for house prices is weak, we see a shift to more needs-driven motivations to move in 2023 and beyond which will support sales volumes.”
He added: “The rapid growth in rents, which shows little signs of slowing, will add to cost-of-living pressures and add continued impetus to first-time buyer demand.”
Sharing tips for sellers looking to list their home for sale, Polly Ogden Duffy, managing director at John D Wood & Co said: “If your property comes with a compromise, such as having a small garden, it’s on a busy road, or it requires a replacement kitchen or bathroom – you need to price accordingly.
“Competing with other properties at the same price point that come without these drawbacks, will only mean that yours will be last to sell. A combination of waiting too long to adjust your price, and more property coming to the market in the New Year will only provide even more choice for buyers.”
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