Zoopla: Asking price discounts narrow as market mood improves

Asking price discounts have hit their lowest levels since last summer as market activity improves across the board, Zoopla claims.

The portal’s latest House Price Index found for March found sellers are accepting an average £10,000 (3.9%) discount to the asking price to secure a sale.

This is an improvement on the £14,250 average discount (4.5%) seen in November 2023 and the lowest level since last July.

It means agents and sellers are now achieving 96.1% of the asking price on average.

Zoopla said more sellers are returning to the market, with the stock of homes for sale up 20% on this time last year, while buyer demand and sales agreed are up 4% and 9% respectively.

The average estate agent had almost 30 homes for sale in Q1 2024, a return to the pre-pandemic average, Zoopla said.

Meanwhile, annual house price declines slowed to 0.5 at £263,600, but remain negative across southern England.

Richard Donnell, executive director at Zoopla, said: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024. House prices are falling at a slower rate but it remains a buyers market where there is much greater choice of homes for sale.

“We don't believe that house prices are about to increase more quickly but there is more buyer interest. Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024”

Commenting on the report, Matt Thompson, head of sales at Chestertons, said: “In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget.

"As this wasn’t the case, the majority of these buyers have since resumed their property search. As a result, March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”

Tom Bill, head of UK residential research at Knight Frank, added:  “Demand in the UK housing market has improved but hasn’t come off the leash yet. Mortgage rates are down compared to last October but higher than in January due to stubborn inflation and Bank of England caution around rates.

"As supply grows, downwards pressure on prices will increase and a wave of people rolling off sub-2% two-year mortgages from early 2022 will add to the financial pressures in the system. Despite the headwinds, which include wider political instability, there will be a recognisable spring bounce this year.”