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Vendors accepting larger discounts off asking prices, says Zoopla

The gap between average asking prices and average selling prices has increased in recent months according to Zoopla.

Its latest study of 16 major cities across the country shows that all bar one showed a widening of the gap in the first quarter of this year compared with 2018.

The current UK average for the gap between asking price and selling price is 3.9 per cent, up from 3.3 per cent in 2018. 

Six cities registered average discounts above the current national average with Aberdeen registering the highest discounts at over 8.0 per cent. This is consistent with the decrease in demand for housing in the city due to the collapse in the oil price since 2015. 

Newcastle and Liverpool also registered higher gaps than the national average although the level of discounts has narrowed over the last three years as underlying market conditions improve.

Only two cities - Glasgow and Edinburgh - registered average sale prices as higher than average asking prices. Typically, properties in Edinburgh sell for 6.3 per cent more while stock in Glasgow shifts for 5.2 per cent above asking price.

In London, which has led the slowdown in house prices, the average differential between asking price and selling price has increased from 4.8 per cent in 2018 to 5.7 per cent now. 

Price falls have been concentrated in inner London areas where average discounts are highest at 7.6 per cent. In some central areas, such as Kensington & Chelsea, buyers continue to achieve double digit discounts while in outer London the gap is 5.1 per cent.

More generally, the level of house price growth across UK cities continues to slow and is now at its lowest since 1996 says Zoopla. 

Price growth ranged from a rise of 5.1 per cent in Glasgow, which is the lowest growth rate of the best performing city since 2012, to a drop of 0.5 per cent in London. 

Overall, house prices increased by 1.7% over the 12 months to April 2019.

The latest index results reveal a softening in the annual rate of growth across most cities with this slowdown now extending beyond southern England. Manchester, Nottingham and Leicester are among the regional cities registering a slowdown in price growth. 

The deceleration in house prices is still most marked in southern England with Bristol, Portsmouth, Bournemouth and Southampton all registering price inflation at or below 2.5 per cent.

“Sellers are having to accept slightly higher discounts to the asking price in order to achieve a sale. This is a natural response to weaker market conditions and buyers are starting to negotiate harder on price” according to Richard Donnell, research and insight director at Zoopla.

“The increase between asking and selling price is off a low base. Correctly priced homes continue to sell within a reasonable period and setting the asking price at the right level remains a key decision to agree with your agent.”

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