Data released by Zoopla has shed light on the challenging landscape for both agents and sellers in the real estate market. The findings indicate a substantial 5.5% average discount on property listings as sellers endeavour to secure a sale, showcasing the impact of changing dynamics on transactions.
According to Zoopla’s latest House Price Index, homebuyers are benefiting from an average reduction of £18,000 per purchase. This shift is attributed to the confluence of higher mortgage rates, which have dampened demand, and a remarkable surge in property supply, granting buyers increased choice and negotiation leverage.
The report underscores a notable trend: the discount from asking prices for finalized sales has hit a five-year peak, surging from a 3.4% average discount earlier in 2023 to the current 5.5% in the first half of November.
The disparity in pricing dynamics is particularly pronounced in the southern regions of England, with London and the South East experiencing an average discount of 6.1%, equating to a substantial £25,000 reduction from the asking price.
Despite a 13% dip in buyer demand compared to 2019 figures, Zoopla notes a resilient trend in new sales. Presently, the volume of these new sales exceeds last year’s numbers by 15% and is 5% higher than pre-pandemic levels in 2019.
Zoopla’s estimations project a trajectory toward one million completed sales in 2023. The surge in available properties for sale, marking a six-year high with a 34% increase compared to a year ago, has significantly altered the market landscape. This influx translates to an average estate agency branch now boasting over 31 properties for sale, a stark contrast to the mere 14 available during the pandemic’s peak.
Moreover, the report highlights an abundance of supply in the market for three and four-plus bed family homes, a trend observed nationwide except in Scotland, the North-East, and North-West, which currently exhibit lower supply levels compared to pre-pandemic times.
Notably, house prices continue to observe a downward trajectory in much of the UK, registering single-digit annual price declines across all price bands. Despite this, Zoopla asserts that there is no indication of an acceleration in price drops in the highest-value markets, such as London, despite the impact of elevated mortgage rates.
According to Richard Donnell, executive director at Zoopla, these conditions represent a favourable environment for homebuyers, characterized by increased housing options and a willingness among sellers to engage in price negotiations for a successful sale. He notes the current disparity between past valuations and prevailing market conditions, with sellers having substantial room for negotiation as average house prices remain significantly higher (£41,350) than pre-pandemic levels.
However, Donnell cautions that while new sales are outpacing previous years, sellers should brace for more negotiation on price. He predicts a slowdown in new sales approaching the holiday season, with some sellers opting to withdraw their properties from the market, intending to relaunch in the new year.