Buyers securing discounts as the number of homes for sale reaches six year high plus an update on Yorkshire property values
The discount to asking price for achieved sales is now at a five year high and has grown to 5.5 per cent for sales over the first half of November compared to a 3.4% average discount in the first half of 2023. This is being keenly felt in the south of England where the average discount to the asking price for sales is 6.1 per cent in London and the South East - equating to a total reduction of £25,000 off the asking price.
Despite buyer demand remaining 13 per cent lower than 2019, new sales are still being agreed with the total volume currently 15 per cent higher than this time last year, and 5 per cent up on 2019 levels. This indicates greater realism on the part of sellers and a growing sense among would-be movers that mortgage rates may have peaked and could start to fall later in 2024.
However, the market remains on track for one million sales completions in 2023, with sales holding up across many parts of Scotland and inner London where market activity has underperformed the rest of the UK over recent years.
In good news for buyers, the number of homes available for sale reached a six year high with 34 per cent more homes for sale now compared to a year ago. This means that the average estate agency branch now has over 31 homes for sale, compared to a low of just 14 in the middle of the pandemic boom, offering more choice for potential buyers. As a result, increased supply boosts choice for buyers but is likely to keep prices under downward pressure as price sensitive buyers continue to negotiate.
This rebound in supply has been recorded in the market for three and four plus bedroom family homes, a trend seen across all parts of the UK. Only Scotland, the North-East and North-West have less supply than their pre pandemic levels.
House prices continue to fall across much of the UK with single digit annual price falls being recorded across all price bands. While higher mortgage rates have hit buying power, there is no evidence of an acceleration in price falls in the highest value markets such as London. In fact, annual price falls in London are lower than across the wider South East and adjacent commuter areas - in part thanks to better value for money and a steady return to office working which is supporting sale volumes and pricing levels.
London house prices remain high in absolute terms but they have failed to keep pace with the rest of the UK over the last six years as the average value of a London home is just 8 per cent higher than seven years ago. This is compared to an increase of 28 per cent across the rest of the UK.
Commenting on the market outlook Richard Donnell, Executive Director at Zoopla says: “These are the best conditions for home buyers for some years with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale. There is a growing acceptance that what a home might have been worth a year ago is now largely academic given current market conditions. Sellers have plenty of room to negotiate with average house prices still £41,350 higher than the start of the pandemic.
"It’s a positive sign that new sales continue to be agreed at a faster rate than a year ago and pre-pandemic. This indicates that house prices do not need to post bigger falls to get people moving but sellers need to be ready for more negotiation on price. New sales will slow as we run up to Christmas and some sellers will take homes off the market ready to relaunch in the new year.”
Zoopla’s house price index for England shows that Yorkshire fared well compared to other regions with just a 0.2 per cent drop in prices beaten only by the North East which had a 0.1 per cent fall. The North West saw a 0.7 per cent slip in values. The highest losses were in the South East with a 4.2 per cent drop and London with a four per cent fall.