Asking price discounts hit four-year high as buyer’...

The average discount to asking price has hit a four-year high as the market swings in favour of buyers, Zoopla says.

The portal’s latest House Price Index for September shows the typical discount to asking price to achieve a sale has hit 4.2%, the highest since 2019.

This number is being skewed by London and the South East where discounts are greater at 4.8%. The figure stands at 2.8% for the rest of the UK.

Zoopla’s report shows buyer demand has improved for the first time since the Spring, up 12% over the past four weeks, although it remains a third lower than a year ago.

The overall stock of homes for sale is up 18% on the five -year average but the flow of new supply is down 6% and sales agreed have fallen 19%, according to the research.

Buyers appear unwilling to compromise on the size of the property they’re looking for despite having 20% less buying power due to higher mortgage rates, Zoopla said.

It suggested would-be buyers are instead waiting for a fall in house prices or mortgage rates to get back into the market.

The report found UK house prices have fallen by 0.5% over the past 12 months to £265,100.

Richard Donnell, executive director at Zoopla, said: “The housing market continues to adjust to a higher mortgage rate environment. Better news on inflation and the end of base rate increases has provided scope for lenders to start reducing mortgage rates which has supported a modest uptick in demand for homes this September.

“Buyers continue to remain cautious and many are waiting for better value for money and improved affordability from lower house prices or further falls in mortgage rates before returning to the market.

“House price falls have been modest with the average house still 17% more expensive than before the start of the pandemic. Forbearance by lenders, tougher mortgage regulations over recent years and a strong labour market appear to have moderated the stress in the market compared to previous cycles that would have driven larger price reductions.

“House prices will continue to drift lower, especially in southern England, ending the year 2-3% lower meaning falling mortgage rates are required to boost activity and attract buyers back into the market.”