It's now a buyers' market, with sellers offering an average discount of £18,000, according to Zoopla.
The property portal’s latest House Price Index found that UK house price inflation had fallen to -1.2%, down from 8.2% a year ago.
In October, there were 34% more homes on the market compared to a year ago, with sellers typically accepting 5.5% (£18,000 on average) off a property’s asking price to agree a sale. This represents the largest discount for more than five years.
Zoopla found that discounts to asking prices for agreed sales were 6.1% in London and the South East (£25,000) and 4.8% (£11,000) for the rest of UK.
Researchers said that “greater realism on pricing” was supporting new sales volumes which are 15% higher than a year ago and 5% up on 2019 levels.
Despite buyer demand remaining 13% lower than 2019, 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 said this indicated a growing sense among would-be movers that mortgage rates may have peaked and could start to fall later in 2024.
Researchers said the market remains on track for one million sales completions in 2023, with sales holding up across many parts of Scotland and inner London where market activity has underperformed the rest of the UK over recent years.
Zoopla found the average estate agency branch now has more than 31 homes for sale, compared to a low of just 14 in the middle of the pandemic boom, offering more choice for potential buyers.
Falling house prices
Zoopla found that house prices were continuing to fall across much of the UK with single digit annual price falls being recorded across all price bands.
But 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. In fact, annual price falls in London were lower than across the wider South East and adjacent commuter areas.
London house prices remain high in absolute terms, but they have failed to keep pace with the rest of the UK over the past six years as the average value of a London home is just 8% higher than seven years ago. This is compared to an increase of 28% across the rest of the UK.
‘Best conditions for home buyers’
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.”
Guy Gittins, CEO of Foxtons, said: “London is consistently the highest value UK property market, so it is less susceptible to the market fluctuations seen elsewhere in the UK. This means London’s homeowners are well-positioned to capitalise on the upcoming bump we see annually from Boxing Day and into the new year.
“In contrast to the rest of the country, London has not experienced a sweeping decline in house prices, however, the market does experience a higher volume of price adjustments.”
