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Large asking price discounts hit three-year high - Zoopla

The level of sellers accepting an asking price discount of 5% or more has hit a three-year high.

Zoopla’s latest House Price Index has revealed 42% of sellers have accepted discounts of 5% or more off the asking price to achieve a sale - the highest level since 2018. 

Higher mortgage rates have also delivered a further hit to buying power - fortifying the buyers’ market for the remainder of 2023, the portal said.


Another 15% are accepting discounts of over 10% off the initial asking price, according to Zoopa’s report.

The average discount to asking price has increased to 3.8%

The research highlights that mortgage rates tipping above 5% have delivered a further 10-20% hit to the buying power of those who are purchasing with finance. 

Mortgage rates moving from 4% to 5% results in an 11% reduction in buying power. However, this increases to 20% with mortgage rates at 6%, up from 4%. 

This appears to  be hitting demand, with 14% fewer buyers in the market over four weeks to 22 June compared with a year ago. However, those that remain appear committed to moving home with sales agreed running 8% above the five-year average, Zoopla said.

The main risk to house price growth, aside from a weakening economy, is a sudden surge in the supply of homes for sale, Zoopla said.

There are some signs that supply is starting to grow at an above-average rate with 18% more homes listed for sale in the past four weeks compared with the five-year average. 

This shouldn’t be compounded by forced sales, Zoopla claims, as it suggests this will be limited thanks to support measures by the Government for existing mortgage holders. An increase in supply would boost choice for buyers and give them more room to negotiate - while also driving larger house price falls, the research warns. 

The report revealed that average annual house price growth has slowed from 9.7% in May 2022 to 1.2% last month, putting typical prices at £261,100.

In terms of the outlook for house price growth, Zoopla still anticipates price falls of up to 5% this year – adding that much depends on mortgage rates and inflation. Long-term, the property website said, house price growth is anticipated to be a lot weaker “as we see a steady realignment of house prices and household incomes over the next three to five years.

Richard Donnell, executive director at Zoopla, said: “The resilience of the housing market and homebuyers is set to be tested once again as mortgage rates increase over 5%. Mortgage rates falling to 4% earlier this year supported a rebound in sales and led to house prices registering small month-on-month gains. 

“Modest price falls will resume in the second half of 2023 as the supply of homes increases giving buyers more choice and room for negotiation on price. We still expect house prices to be 5% lower over 2023 and there is a very substantial equity buffer to absorb price falls which are likely to be concentrated across southern England.

“Demand for homes remains but those households looking to move home in 2023 need to be very realistic on pricing and get the view of agents on where to pitch their asking price to secure a sale.”


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