Homebuyers are in the strongest negotiating position for five years with an average £18,000 knocked off asking prices to land a deal amid a choppy housing market, research has shown.
The average discount on a house purchase has reached its highest since 2018 in a further sign that it remains a “buyer’s market” despite the long-term shortage of homes in the UK.
Research by the property website Zoopla showed the average discount to asking price for completed sales grew to 5.5% in the first half of November, up from 3.4% across the first half of 2023. The discount was even greater in London and the south-east of England, at 6.1%, which equates to £25,000.
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The UK’s property market has been in flux since Kwasi Kwarteng’s disastrous “mini-budget” – which ultimately led to the departure of the then prime minister, Liz Truss – sent mortgage costs soaring.
The Bank of England has more recently kept interest rates on hold at 5.25%, indicating that the series of hikes may have ended – some mortgage deals have fallen back below 5% as a result.
Despite signs of mortgage rates easing, pressure remains on those selling homes to accept lower prices. Zoopla said that conditions were the best for buyers since 2018, when Brexit uncertainty hung over the market, though financing costs were lower back then.
The company said there was now “greater realism on the part of sellers” in the price they were willing to accept, allowing the number of transactions to rise by 15% on last year.
The number of homes for sale is at a six-year high, with a strong supply of three- and four-bedroom family properties.
Buyer demand is still 13% lower than 2019, before the pandemic caused a boom in property demand.
The research showed UK house price inflation has eased from 8.2% a year ago, to -1.2%. Separate figures from the Office for National Statistics (ONS), released earlier this month, showed the average price of a home in the UK dropped by 0.1% in the year to September – the first annual fall for more than a decade.
The ONS said the typical cost of a UK home was £291,000 in September.
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Richard Donnell, the executive director at Zoopla, said: “These are the best conditions for homebuyers 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.”
However, Donnell said that sellers still have “plenty of room to negotiate” as average house prices are £41,350 higher than at the start of the pandemic. He expects sales to slow before Christmas and some homes to be taken off sale and remarketed in the new year.
House sales have held up well in part of Scotland as well as inner London, the Zoopla research showed. Guy Gittins, the chief executive of the London estate agent Foxtons, said: “London is consistently the highest value UK property market, so it is less susceptible to the market fluctuations seen elsewhere in the UK.
“This means London’s homeowners are well-positioned to capitalise on the upcoming bump we see annually from Boxing Day and into the new year.”
