Asking price discounts hit five-year high - Zoopla

Agents and sellers are taking an average 5.5% discount on listings to secure a sale, new Zoopla data shows.

The portal’s latest House Price Index shows homebuyers are securing an average of £18,000 off a purchase as higher mortgage rates hit demand and record supply boosts their choice and negotiating power.

The discount to asking price for achieved sales is now at a five-year high and has grown to 5.5% for sales over the first half of November compared with a 3.4% average discount in the first half of 2023, Zoopla said.

This is being keenly felt in the south of England where the average discount to the asking price for sales is 6.1% in London and the South East - equating to a total reduction of £25,000 off the asking price.

Despite buyer demand remaining 13% lower than 2019, Zoopla said new sales are still being agreed with the total volume currently 15% higher than this time last year, and 5% up on 2019 levels.

Zoopla estimates that the market remains on track for one million sales completions in 2023.

The report found the number of homes available for sale reached a six-year high with 34% more homes for sale now compared to a year ago. 

This means that the average estate agency branch now has over 31 homes for sale, compared with a low of just 14 in the middle of the pandemic boom, offering more choice for potential buyers. 

This rebound in supply has been recorded in the market for three and four-plus bed family homes - a trend seen across all parts of the UK. Only Scotland, the North-East and North-West have less supply than their pre pandemic levels, Zoopla said.

House prices continue to fall across much of the UK with single digit annual price falls being recorded across all price bands, according to the report.

But Zoopla said while higher mortgage rates have hit buying power, there is no evidence of an acceleration in price falls in the highest value markets such as London. 

Its report found house prices were down 1.2% annually in October to £264,600 

Richard Donnell, executive director at Zoopla, said:   “These are the best conditions for home buyers for some years with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale. 

“There is a growing acceptance that what a home might have been worth a year ago is now largely academic given current market conditions. Sellers have plenty of room to negotiate with average house prices still £41,350 higher than the start of the pandemic.

“It’s a positive sign that new sales continue to be agreed at a faster rate than a year ago and pre-pandemic. This indicates that house prices do not need to post bigger falls to get people moving but sellers need to be ready for more negotiation on price.  New sales will slow as we run up to Christmas and some sellers will take homes off the market ready to relaunch in the new year.“