Buyers negotiating £18,000 average discount off next home

Home buyers are negotiating an average £18,000 reduction off their next home, Zoopla’s latest House Price Index reveals.

Its findings show a strong buyer’s market as higher mortgage rates hit demand and more supply boosts choice and negotiating power.

ACHIEVED SALES

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 to a 3.4% average discount in the first half of 2023.

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, new sales are still being agreed with the total volume currently 15% higher than this time last year and 5% up on 2019 levels.

Meanwhile, the number of homes available for sale has 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 to a low of just 14 in the middle of the pandemic boom.

Richard Donnell, Executive Director at Zoopla says:  “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.”

Tom Bill, Knight Frank head of UK residential research, says: “The outlook has begun to improve as the Bank of England’s job appears closer to completion and inflation falls below 5%.

“The story of this slowdown hasn’t been falling prices but low sales volumes as buyers and sellers both hesitated.

“As confidence and activity levels rise, the market will re-price and a spring bounce in 2024 becomes more likely after a largely non-existent autumn market this year.”

But Nigel Bishop of buying agency Recoco Property Search, cautions: “Many sellers are still basing their asking price on the influx of buyer demand seen during the pandemic but fail to acknowledge that the market has begun rebalancing since.

BUYER’S MARKET

“It is very much a buyer’s market right now and house hunters are more determined to negotiate the asking price or continue their search otherwise.

 “That being said, the volume of any price reduction is subject to the property location and overall value. Properties that are located in sought-after areas tend to hold their value with the majority of sellers insisting on achieving their asking price.”

And Guy Gittins, Foxtons Chief Executive, says: “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.

“A good agent understands where the market is trading and has the data to find the best price that will still stimulate activity.

“Going into the new year sales surge, selecting the right agent that utilises the market information well will be critical to homeowner’s achieving their property goals.”