The property market is seeing a shift as more sellers accept offers significantly below their asking prices, according to property website Zoopla.
The company’s June House Price Index indicates that 42% of sellers are accepting offers over 5% below the asking price, marking the highest figure in five years.
In addition, 15% are taking offers 10% below the asking price, with the average discount reaching 3.8%.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “We could be piling properties high and selling them cheap in the second half of the year, as mortgage misery throws houses into the bargain bucket.”
Coles pointed out the gravity of this shift, highlighting that “an alarming 15% have had to accept a 10% discount – or more,” and suggested that “if rates stay higher for longer, this could just be the start of it.”
Zoopla’s report also observed a fall in demand, with 14% fewer buyers than last year, and a surge in supply, with 18% more homes entering the market compared to the five-year average.
Despite an annual increase of 1.2% in house prices, Zoopla predicts a downward trend in the latter half of the year, with prices anticipated to fall by 5% by the close of 2023.
Coles cautioned that a rise from 4% to 6% in mortgage rates could decrease buying power by 20%, potentially impacting the housing market further. She said: “As the impact of mortgage rate hikes feeds through into sales, we can expect this to intensify.”
As the Government makes attempts to ease the impact of these shifts on borrowers, Coles warned that more forced sales could lead to a greater price fall than Zoopla’s prediction. She concluded: “More forced sales could make Zoopla’s prediction of a 5% price fall start to look fairly optimistic.”
