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UK house prices being cut by £14k to make a sale

home Houses are seen on Highgate Hill in north London April 3, 2014. London house prices have increased by 20 per cent in the last year, local media reported.  REUTERS/Suzanne Plunkett (BRITAIN - Tags: REAL ESTATE BUSINESS)
The average property price in the UK is now £260,800 as home sellers are forced to take a discount in order to sell. Photo:Suzanne Plunkett/Reuters (Suzanne Plunkett / reuters)

High mortgage rates have forced one in 10 home sellers to cut just over £14,000 off their asking prices as demand slumps.

The average property price in the UK is now £260,800, property website Zoopla said, which means sellers are taking a cut of £14,100 or a 4.5% discount.

It is the highest gap between the asking price and sale price for five years, according to Zoopla, and follows several months of falling house prices.

The discounts-to-asking price reflect the market adjusting to the reduction in buying power, as higher mortgage rates affect affordability, according to the website.

More than four in 10 (41%) homes currently listed for sale on Zoopla have had their asking prices reduced to attract buyers, the website said.

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Richard Donnell, executive director at Zoopla, said: “Greater realism on the part of sellers is supporting housing market activity in the face of higher borrowing costs.

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“Many homeowners are sitting on sizeable house price gains made over recent years and have more room to be flexible accepting offers below the asking price.

“Discounts to asking price have widened and while 4% to 5% discounts are manageable, if these were to widen further then this would point to a greater likelihood of larger house price falls.

“We believe the market remains on track for a soft landing in 2023, with modest price falls of up to 5% and one million housing sales.”

The average estate agent office has 24 homes for sale compared with 15 a year ago, creating more choice for home buyers who have more room to negotiate on price.

While some sellers are shaving money off their asking prices, separate research from Halifax found house prices have already typically made significant gains during the pandemic.

UK house prices increased by 20.4%, or £48,620, on average between January 2020 and December 2022, Halifax said.

In the three previous years – January 2017 to December 2019 – prices increased at 7.8%, or £17,158 on average.

Between January 2020 and December 2022, the average price of a flat increased by 13.3% or £19,028, Halifax said.

The average price of a terraced home rose by 21.1% or £38,743.

Amid the “race for space” seen during the pandemic, a typical semi-detached home added 23.1% or £55,361 to its value, and an average detached home added 25.9% or £93,345.

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Kim Kinnaird, mortgages director at Halifax, said: “The pandemic transformed the shape of the UK property market, and while some of those effects have faded over time, it’s important we don’t lose sight of the huge step change seen in average house prices.

“Heightened demand created a much higher entry point for bigger properties right across the country, and that impact is still being felt today by both buyers and sellers, despite the market starting to slow overall.

“Taking detached houses as an example, average prices remain some 25% higher than at the start of 2020.

“Even if those values were to fall by 10%, they would still be around £50,000 more expensive than before the pandemic.”

Watch: How much money do I need to buy a house?

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