Home sellers are forced to slash prices to find buyers

Home sellers are forced to slash prices to find buyers

9:29 AM, 28th February 2023, About A year ago

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Home sellers are having to slash asking prices in a bid to find a buyer, one house price index reveals.

Zoopla says that home sellers are accepting an average 4.5% discount on the asking price – that’s the highest amount in five years.

And, as the buyer’s market takes hold, price inflation has slowed down from 8.6% last year, to 5.3% in February.

Buyers have also deserted the market with sales volume down by up to 50% in some areas – that’s slightly lower than last year but just ahead of the pre-pandemic years of 2017-2019, the property platform says.

Average discount on an asking price is £14,000

The figures show that the average discount on an asking price is £14,000 which means that sellers are sacrificing around a third of their lockdown gains to find a buyer.

Zoopla also says that with house prices under pressure, price inflation will fall ‘into negative territory’ in the summer.

Though they are predicting a ‘soft landing’ with prices dropping by 5% and around 1 million house sales this year.

Richard Donnell, the firm’s executive director of research, said: “It is welcome to see evidence of greater realism from sellers on pricing to secure a sale.

“The gains made over the last two years provide a buffer that can be used to unlock sales and it appears that this adjustment in pricing is uniform across the market by area and property type.”

He highlights that working from home, increased retirement and high immigration are stimulating demand to move home with cost-of-living pressures forcing some people to move.

‘Property market has been tipped into the bargain bin’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “The property market has been tipped into the bargain bin, with buyers slashing prices by an average of £14,100.

“These are the biggest discounts in five years, and are a sign that prices are on their way down.

“However, it’s not necessarily the property market’s ‘closing down sale’ because there are still some positives.”

She added: “We’re definitely in a buyers’ market, and we can see clear signs of a slowdown.

“Buyer demand has fallen by half from last year, and sales volumes are down by a quarter.”

Buyers are driving a hard bargain

Ms Coles says that with more properties struggling to find a buyer, means that buyers are driving a hard bargain.

She adds: “It means the gap between asking and selling prices isn’t just wider than we saw during the boom years – it’s wider than before the pandemic.

“We still expect house prices to drop during 2023, and for sales to freeze up. Zoopla says we could get year-on-year falls as early as the summer.”

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